Carmel Cos.’ apartment portfolio in the Denver area – believed to be the largest on the market nationwide – is being listed for $967.4 million, officials confirmed today.
The portfolio is broken into two parts.
The largest piece includes 22 properties and is listed at $902 million. The remaining seven properties are listed at $65.4 million, said Dan Woodward, a multifamily broker who is part of the CB Richard Ellis team listing it. The portfolio includes more than 8,000 units.
“I don’t know of a bigger portfolio for sale in the country,” Woodward said.
Tuesday first bid date
The first deadline for prospective buyers is next Tuesday, July 12. The properties were first put on the market last May.
“July 12 is our first bid date to kind of get a feel for where the offers are coming from, at what price, how the equity is being matched up with the sponsors, how they are going to finance the deal, and so on,” Woodward said.
From there, CBRE will “narrow the field,” and will invite back the strongest bidders to participate in a more formal process.
The strongest prospective bidders will be given tours of the property, which have not been offered until now, although Woodward noted that there is nothing stopping a prospective buyer from driving by any property.
“We are then expecting to have a round of best and final offers,” Woodward said.
He expects the process to move pretty quickly.
“I think within a week we will have chosen our buyer – or buyers,” he said.
Woodward said the Zeff family is willing to sell the entire portfolio – either the 22 or 29 properties – to a single buyer, or break it up. The portfolio was built by the late Kal Zeff.
“I don’t think the seller has a preference,” he said. “I think it is much more about creating the most value.”
The prospective buyers are all over the map, as far what they would like to own.
“There are a handful of groups who plan to bid on the entire portfolio and many more bidding on a smaller, sub-portfolio and even more groups that have indicated they want to bid on one or two of the assets,” Woodward said.
400 confidentiality packages
Demand has been strong.
“I would say that we have sent out close to 400 confidentiality packages,” to those requesting information, he said. “I would say that exceeds our expectations by a little bit. It is such a high-profile portfolio at a time when the rental market is very strong, we knew that there would be a huge amount of interest in it.”
Interest has come from large, national groups, as well as local groups. Some potential buyers are looking at tapping foreign capital.
The Carmel portfolio not only will be by far the largest apartment sale in Denver’s history, but also could serve as a catalyst for other apartment deals, as big players in the investment world focus on Denver.
Spotlight on Denver
“I would say this deal is shining a light on Denver,” Woodward said. “Just because of this portfolio, a lot of people are taking a look at Denver. Some of these people have never looked at Denver before. The dynamics here are all very good, with rents rising and vacancies dropping.”
Jeff Hawks, of Apartment Realty Advisors, agrees.
“The timing of this portfolio coming on the market is perfect,” Hawks said. “Vacancy rates are the lowest they’ve been in 10 years, rents are increasing and it is a great time to get financing, with interest rates being so low. “
Hawks said that he, and other brokers in the market hope that CBRE gets top dollar for the portfolio.
“If they get the highest price possible, it helps everyone else’s comparables,” he said.
Hawks also agreed with Woodward that the Carmel portfolio is putting Denver on the map as far as interest from apartment investors.
“What it is doing is having a lot of people focus on Denver who have never been in this market before,” Hawks said. “This is a big-league portfolio. There have only been a few times in history when you have the opportunity to own a portfolio of this size. And to have it all in one market makes it that much more unique.”
To learn more, visit this link for Dan Woodward’s contact information.