Vukota Capital Management Acquires Wind River Place in Colorado Springs, Colorado
01 September, 2015
Denver, CO – Vukota Capital Management (VCM) has acquired Wind River Place located at 919-935 N. 19th Street in Colorado Springs, Colorado for a total purchase price of $7.5 million. The 120 unit, 3-story garden style apartment complex is currently 98% leased. The buildings are in good condition with significant upgrades having been completed over the last 5 years. With nominal renovations required, Wind River Place is considered a turn-key asset in a desirable location, providing strong returns.
The purchase price is attractive at ~$63,000 per unit versus in excess of $70,000 per unit for comparable properties, and is estimated to be ~40% discount to replacement cost, creating a competitive barrier to entry. Further, VCM believes that the acquisition presents a significant value-add opportunity to increase cash flows given that market rents based on recent lease renewals are ~5.2% greater than current average rents.
The transaction was closed on August 28, 2015, and brings VCM’s multifamily holdings to 6 properties in Colorado.
The transaction is funded by investments of equity capital from VCM and other accredited investors, as well as $2 million in mortgage financing from First Bank.
VCM multi-family strategy is to acquire properties in secondary and tertiary markets below replacement cost in growing supply constrained communities where, over the long-term, rents are expected to increase above the rate of inflation. Key value drivers that VCM considers are the number of jobs created relative to unit supply, and the spread between cap rates and borrowing costs. VCM’s typical property acquisitions range between 100 and 400 units, or $5.0 million to $35.0 million purchase price.