DENVER — Denver-based multifamily developer Zocalo Community Development and its capital partner Principal Real Estate Investors have agreed to sell the 219-unit Cadence Union Station apartments to an institutional client of Invesco Real Estate. The sales price was undisclosed, but the Denver Business Journal reports that sources familiar with the deal have valued the transaction at approximately $70 million.
Cadence Union Station is the first multifamily project to open in Denver's Union Station neighborhood. The apartment community welcomed its first residents in January and is currently 20 percent leased.
“We had a distinct advantage by being the first to build in the Union Station neighborhood, acquiring what's arguably the best location and building an asset that we believe will show itself to be one of enduring value,” says David Zucker, principal of Zocalo Community Development. “Invesco's focus on the strength of Union Station, the location of Cadence and its quality are aligned with our development ethics. We sense in Invesco a shared commitment of stewardship, making them an apt purchaser of this incredible asset.”
Zocalo will continue to mange and lease the property, which features a 13th story rooftop pool and fitness center and a community jazz room, complete with baby grand piano and classic jazz album artwork.
“These features and community-creating spaces make Cadence a wonderfully unique property, immediately distinguishable for its character and quality,” says Susan Maxwell, partner and director of real estate at Zocalo. “It's an honor to continue to manage what we believe is Denver's finest high-rise apartment for Invesco.”
The LEED Gold certified building features the Velo Room, a complete repair shop for bikes, skis and snowboards; one-to-one bike-to-auto parking; and an HVAC system that is expected to reduce resident utility costs by 50 percent.
Cadence is located in the 20-acre Union Station redevelopment, which includes a 22-bay underground bus terminal, eight-track commuter rail station and the renovation of the historic Union Station, all of which are scheduled to open in July.
The community also sits equidistant between two sets of light rail tracks, 250 feet from the station and an approximately 30-second walk to the Denver International Airport rail line, which will open in 2016. The rail line will allow travelers to check their bags at the station and pick them up at their final destination.
Cadence residents are also minutes by foot, bike or bus from some of the city’s popular restaurant districts. The free mall shuttle also offers access to most of downtown Denver.
“Invesco's investment in Cadence underscores the transformational impact that the redevelopment of Denver Union Station into the multi-modal transportation hub will have for the entire Rocky Mountain region,” says Tami Door, president and CEO of the Downtown Denver Partnership. “This transaction confirms what many developers have known for some time — an investment in Denver Union Station is a once-in-a-lifetime opportunity that can't be missed.”
Principal Real Estate Investors' Green Property Fund provided the equity for the project. This is Principal and Zocalo's second of three joint ventures. The first, Solera, sold in 2011 for what was then the highest price per unit in the state's history. Solera was the first LEED Gold certified high-rise apartment building in Colorado.
The partners' third joint venture, located at the northeast corner of Steele Street and 1st Avenue in the Cherry Creek district of Denver, is three months from the start of construction.
Zocalo Community Development is a development and management services company focused on creating sustainable communities in the greater Denver area.
Des Moines, Iowa-based Principal Real Estate Investors manages or advises $37.3 billion in commercial real estate assets and is the dedicated real estate group of Principal Global Investors, a diversified asset management organization, as well as a member of the Principal Financial Group.
Established in 1983, Atlanta-based Invesco Real Estate manages $55.7 billion of real estate investments, which includes $20.4 billion in U.S. direct real estate portfolios, $7.3 billion in European direct real estate portfolios, $4.9 billion in Asian direct real estate portfolios and $23.1 billion in real estate securities (as of December 31, 2013). The real estate investor has about 360 employees in 18 offices worldwide.
— John Nelson