Oak Coast Properties Announces the $129 Million Acquisition of Pembrooke on the Green Apartments

LOS ANGELES, CA – Oak Coast Properties announced today the $129 million acquisition of the Pembrooke on the Green Apartments in Denver, Colorado. Boasting an irreplaceable location in the southeast quadrant of the city, which is experiencing record population growth, the acquisition offers significant upside potential via a value-add investment strategy. Oak Coast Properties has earmarked the rental community for $1.9 million in capital improvements to commence immediately. HFF provided a $103 million loan to Oak Coast Properties for the acquisition.

“This acquisition marks our firm’s largest to date and brings our Denver portfolio to more than 2,300 units,” said Phillip Nahas, Oak Coast Properties’ Co-Founder and Managing Partner. “Having acquired and amassed a portfolio with a valuation of nearly a billion dollars and with the continued strategic alliances we have with our capital partners, we are committed to achieving above market risk adjusted returns through our investment strategy in Denver and other strategic markets across the country.”

The Pembrooke on the Green asset showcases Oak Coast Properties’ bullishness on multifamily investment in the greater Denver metro region. With more than 50,000 new residents moving into the Denver market annually, and for-sale new home construction still lagging, rental demand continues to push upward. Yearly demand for rental units is an expected 17,000 apartments, while new rental unit projections in both 2016 and 2017 anticipate only 14,000 new units coming to market.

“Denver’s growing population is putting significant pressure on the housing market, with new unit deliveries unable to keep up,” added Nahas. “Positive employment growth combined with these forceful market dynamics provides a ripe opportunity to drive returns through the upgrade of existing apartment assets such as Pembrooke on the Green.”

Originally built during 1974 – 1980, Pembrooke on the Green boasts a current occupancy of 95 percent. The community includes 959 apartments set within 37 three-story buildings and offered as a mix of studios, one-bedroom and two-bedroom units. In-unit amenities include central air conditioning, fireplaces, walk-in closets, cable TV hookups, garbage disposals and frost free refrigerators. Brushed nickel fixtures, ceiling fans, skylights, and vaulted ceilings adorn select units. Robust community offerings include a barbeque and picnic area, business center, carports, two clubhouses, community kitchen, dog park, fitness center, two heated swimming pools, sauna, laundry rooms, playground, soccer field, splash park and walking path. 

Pembrooke on the Green is located at 10700 E. Dartmouth Avenue in Southeast Denver. Just north of the I-225/I-25 junction, the community sits within close range of Denver Tech Center, Downtown Denver, Fitzsimons Life Science District and Denver International Airport. Four projects totaling more than 1 million square feet of offices are currently under construction in Southeast Denver metro and are expected to drive up demand for apartments even further. 

The renovation of Pembrooke on the Green will include extensive upgrades to landscaping and outdoor furniture; parking lot, concrete and stair repairs; roof and gutter repairs; steel fixes; exterior upgrades including to the leasing office, pool, clubhouses and laundry rooms; mechanical work including electrical and plumbing work.

“Our capital improvements to the community, along with improved property management and oversight, will allow us to bring rents in-line with similar market rate properties in the region and drive additional ROI,” said Nahas.  This asset continues OCP’s tradition of identifying, acquiring and adding value to superior assets acquired with conservative underwriting and superior management and producing above market risk-adjusted returns for our investors”. 

Managing Director Charles Halladay and Associate Directors Lee Redmond and Brock Yaffe of HFF’s debt placement team assisted in securing the $103 million Freddie Mac loan for the acquisition of the property. “Freddie Mac stepped up in a big way as usual, financing a property that fits their mission goals pertaining to affordability and green enhancements, as well as their streamlined ability to execute rate locks at a moment’s notice,” said Halladay.

Miami-based Pensam Residential provided a portion of the equity financing. BLDG Management, the Denver-based real estate management company specializing in multifamily and commercial property operations, will manage the community. Pembrooke on the Green marks the fourth project in partnership with Oak Coast Properties and brings BLDG’s Denver multifamily management portfolio to approximately 5,000 units. “Pembrooke on the Green is one of the largest multi-family assets in the Denver Metro area,” said Max Bresner, COO for BMC Investments, an affiliate of BLDG Management. “I am thrilled to run point on executing Oak Coast Properties’ vision for this property in collaboration with the talented team of professionals at BLDG.”

Oak Coast Properties is an active investor/owner pursuing class B and C multifamily community and hotel property acquisitions for the implementation of a value-add, long-term hold investment strategy emphasizing net operating income growth potential. The firm aggressively targets well-positioned properties across the Eastern Seaboard, Pacific Northwest, and Western United States for acquisition. 

About Oak Coast Properties: Co-founded in 2011 by Matthew Heslin and Phillip Nahas, Oak Coast Properties is a developer, owner and manager of multifamily and hotel properties. The firm applies a long-term investment approach to maximize the value inherent in each property holding. Oak Coast Properties is headquartered in Los Angeles, California.

About HFF: HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF).  HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry.  HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing.  For more information please visit hfflp.com or follow HFF on Twitter @HFF.

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