Denver Buyer Pays $20M for Broken Condos

Wells tells GlobeSt.com that he and Arsenault plan to sell the units at 80 E. Rio Salado Pkwy. at a discount, "and pass along some of the savings we were able to achieve to buyers," he remarks. When Bridgeview at Hayden Ferry was completed by SunCor Development in 2006, the condominiums sold for around $800,000 per unit. Condo Capital Solutions acquired the remaining units from SunCor for an average price of $317,000 per unit.

Arsenault and Wells were active in Phoenix shortly after the last downturn, buying apartments in 2002 and 2003 to convert into condominiums under the corporate name Colorado & Santa Fe. The partners sold their final condominiums in late 2005 and early 2006, leaving the market at its peak. "We studied the cycles, and were seeing a lot of signs that it was time to get out when we did," Wells says. "When you see a lot of people lining up at the door to buy, you know it's time to get out."

However, the time is right to get back in, and Phoenix is one of three markets that Arsenault and Wells are targeting. Phoenix, he points out, is very close to hitting bottom, if not already there.

"Phoenix is one of the markets in the country that have been down the most," Wells comments. "We like the markets that have receded quite a bit. It's why we're in Florida and why we're looking at Las Vegas and Arizona."

The Bridgeview acquisition is the Denver, CO company's eighth deal since September 2008, when it launched its plan to acquire $400 million of distressed condo projects. Since fall of last year, Condo Capital Solutions acquired assets in Jacksonville and Miami, FL.

Condo Capital Solutions research manager Dan Sorrells tells GlobeSt.com that Condo Capital Solutions is an opportunistic buyer looking for products that have a market. "We'll look at broken deals and REOs; we've had experience running hybrids," he adds. "If there's a value to either sell, or a rent-hold and a sale later on, that's what we want."

Wells adds that the company also would like more notes in its portfolio; in fact it has a couple under contract right now that are scheduled to close within the next few days. He declined to discuss the sale in any detail. "We're just going to be the lenders, at least, for awhile on those," he comments.