JLL Income Property Trust Buys Denver Apartments for $52M
The REIT purchased Pinecone Apartments, a 13-building, 195-unit apartment community in the Denver suburb of Fort Collins.
NAV REIT JLL Income Property Trust has acquired Pinecone Apartments, a 13-building, 195-unit apartment community in the Denver suburb of Fort Collins. The property has historically strong occupancy, with a current availability rate of only 3%.
The Denver apartment market has grown significantly over the last several years, and Fort Collins specifically is ranked third on La Salle Research & Strategy’s small apartment market analysis. The submarket benefits from a limited new construction pipeline, a low long-term vacancy rate of 4.3% and annualized apartment rent growth of 4% over the last 15 years.
The submarket also features a strong labor pool, thanks to nearby Colorado State University, and an A-rated school district. Together, these factors make the submarket not only an attractive place for renters, but support strong investment fundamentals. According to Allan Swaringen, JLL Income Property Trust President and CEO, these characteristics also align well with the REIT’s investment strategy.
Investment activity has been robust in the market this year, and last year, investors were reporting that the pandemic did not result in any discount in pricing. When Oak Coast Properties sold the Pembrooke on the Green Apartments in Denver for $163 million in September 2020, it revealed pricing confidence in the market. While many investors have been expecting and awaiting a price reduction in multifamily, Phil Nahas of Oak Coast says that the pricing reduction did not happen, and the firm has been an active buyer in the Denver market.
This year, other big deals have shown a similar trend on pricing. Kennedy Wilson expanded its Denver apartment portfolio with the purchase of Griffis Marston Lake, a 332-unit apartment complex, for $134 million; Nuveen Real Estate sold the 1,184-unit, upscale apartment community, Palomino Park Apartments, in the Denver suburb of Highlands Ranch for $435 million; and Blackstone Group acquired a class-A, 206-unit multifamily community in Denver for $65.9 million.
JLL Income Property Trust’s purchase of Pinecone Apartments brings the REIT’s total residential allocation to more than $2.0 billion, or 43% of total assets.