$117,573 per Unit for Heritage Creek

The sale is the third-largest so far this year in the Denver area, but the price per unit of $117,573 is the most paid.

"I would say that the replacement cost would be $125,000 to $135,000 a unit, so we did not buy it much below retail," Zoellner tells GlobeSt.com. "But the unknown is the land. You just can't find 15 acres to develop in this area."

Jeff Hawks, a broker with Grubb & Ellis, agrees. Neither Hawks nor any otherbroker was involved in the direct deal.

"The site is irreplaceable," Hawks said. "Mike is a very smart real estate guy. If he paid this price, I'm sure he's got a really good plan going forward."

The seller was L&B Multifamily Advisors of Dallas. L&B was the joint venture partner of Lincoln and had a buy-out option, which it exercised. Zoellner says Heritage Creek is a long-term hold for him.

"We expect to own it for 10 to 12 years," Zoellner tells GlobeSt.com. "We'll be repainting it and will do some concrete and asphalt repairs and adding some new amenities. It does not have Internet service, so we'll be providing high-speed Internet, for example. I think over time we'll add things like granite counters. Our long-term exit strategy probably will be to convert them into condos."

When Zoellner left Legacy, a spin off from Lincoln, last August, he expected to spend at least 50% of his time developing properties.

He actually launched RedPeak in December, and by that time the market had changed.

"The market doesn't need any new apartments," Zoellner tells GlobeSt.com. "It is a soft market out there. I think given the current economic environment we need to be focused on buying well-located infill properties that will provide some good long-term value and will provide some downside protection.