DENVER—California-based Gelt Inc. has paid $74 million for a 3300 Tamarac, a 564-unit apartment community in Denver. This marks the firm's largest apartment property purchase to date in terms of both units and price, as well as its first acquisition in Colorado. The property was acquired from Los Angeles-based TruAmerica Multifamily.

According to Jeff Harris, director of acquisitions with Gelt, "3300 Tamarac checked all the boxes for our acquisition criteria. The asset is strategically located in an infill submarket with immediate access to major transportation, key employment centers, and an array of retail options. Additionally, the seller invested a significant amount of capital in a successful value-add program. We see continued upside through renovation of the remaining classic units and the addition of new amenities such as a bike room, additional storage, and an outdoor recreation area."

Damian Langere, partner of Gelt, adds, "The area surrounding the property has seen a tremendous transformation in the last few years with the opening of a new Whole Foods two blocks away and Target across the street. The asset's stellar location ensures a long-term competitive advantage for apartment housing in the local market."

Built in 1977 and situated on just over 25 acres, the 15-building pet-friendly property offers studio, one- and two-bedroom units ranging from 450 square feet to 1,035 square feet that feature private balconies or patios, fireplaces and extra storage. On-site amenities include three outdoor swimming pools, a clubhouse, barbecue grills, fitness centers, racquetball court, business center, and a lounge area.

The property is strategically located at the intersection of the I-25 and the I-225 and is near the northern border of the Denver South Business Corridor. This submarket is home to seven of the nine Fortune 500 companies in the state, includes more than 40 million square feet of office space and offers a growing employment base currently exceeding 300,000 jobs. The asset's location also puts it within 10 to 20 minutes from some of the largest employment centers in Denver.

Keith Wasserman, partner with Gelt, says his firm likes the Denver region for investment because "it has diverse economic drivers, impeccable migration statistics as a result of job growth, great quality of life,and a growing population of Millennials. All of these key fundamentals are driving a healthy apartment market."

David Martin of Moran & Co. represented both the seller and buyer in the transaction. Brian Eisendrath and Ross Moore of CBRE procured the debt for Gelt.

All told, year-to-date Gelt has acquired a total of 1,192 units valued in excess of $140 million. The firm's target for 2016 is aimed at acquiring 2,000 additional units within high growth infill locations throughout the Western US.

"Our investment strategy for next year will be to continue to look for well-maintained apartment properties that total at least 100 units and offer some degree of upside through renovations and/or improved operations," says Wasserman. "We are also going to more aggressively target newer urban properties in central business districts, which is something we haven't focused on previously."

TruAmerica hadacquired the complex in a March 2014 in a partnership with DVO Real Estate and RCG Longview and recently completed an extensive renovation and repositioning of the property. Improvements to the interior units included plank flooring, refreshed color schemes and countertops, lighting and the addition of USB charging ports. The scope of work also included major renovations to the clubhouse and lounge, leasing office and common grounds, in addition to expanded recreation areas and additional state-of-the-art fitness equipment.

Tamarac is the first asset sale for value-add specialist TruAmerica, which has invested approximately $2.4 billion building a portfolio of more than 14,000 units in its first two-and-a-half years of existence. 

"We exit Tamarac after meeting our five-year investment objectives in just 18 months," says TruAmerica president and CEO Robert Hart. "It is a large, well-located asset that still offers additional upside for an experienced operator like Gelt."

TruAmerica continues to see Denver as an attractive market for multifamily investment as demand for affordable quality apartments far outpaces supply. In September, TruAmerica acquired the Cherry Creek Club, a 561-unit community for $71 million.  With the sale of Tamarac, TruAmerica's Denver portfolio totals 1,675 units.