Denver apartment complex sells for record $350 million

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The Breakers Resort, a 1,523-unit apartment complex at 9099 E. Mississippi Ave. in Denver, has sold for a record price of close to $350 million, according to public record.

Florida-based Pensam Residential, BH Equities LLC and Wafra Capital Partners acquired a majority stake in the property, which was previously owned by The Bascom Group and Denver’s Koelbel & Co.

The purchase price makes the sale the largest apartment trade in Colorado’s history.

The apartments are spread among six “villages” that sit on 190 acres of land in eastern Denver near the border of Aurora. The purchase also includes a 26,000-square-foot recreation center. An 18-acre parcel of land that could be developed in the future was not included in the sale and is still owned by Bascom and Koelbel.

Koelbel, which was the original developer of the project, retained a stake when Bascom bought into Breakers in 2006. Koelbel will continue to retain a minority stake in the property, according to a release Wednesday.

“Koelbel and Company has always prided itself on a long term vision of legacy communities that add to and enhance the fabric of where we live,” said Koelbel & Co. president, Walter A. ‘Buz’ Koelbel, Jr. “Continuing our 26-year involvement with a community as unique as The Breakers certainly captures our philosophical approach.”

“We are delighted that Koelbel and Company, original co-developer of The Breakers beginning in 1989, will remain a minority partner with continued input on the strategic vision for the future of the community,” said Michael Stein, founding partner of Pensam Residential.

The sale was handled by ARA, A Newmark Company.

“The Breakers occupies a prime infill location in a millennial-driven submarket and buyer activity was greatly increased due to the property being a prime candidate for a value-add strategy.” said Terrance Hunt of ARA Newmark. “The Breakers is simply unmatched in its size, scope and standing as the only community with a private lake and virtually endless amenities.”

In addition to being the largest transaction in Colorado’s history, the trade is the second-largest apartment sale in the country this year, according to ARA.

”The sale of the Breakers is among the highest in the United States for multi-housing in 2016, second only to a sale in Manhattan. Sixteen years ago, large, national investment groups would not have invested even $100 million in Denver,” said Jeff Hawks of ARA Newmark. “Today, the city has truly captured the attention of these investors and is now competing with coastal markets. In fact, we received over 20 offers, and the key was finding a buyer who thoroughly understood the future opportunity and the operations of the property.

Breakers sold for $229,809 per unit, and as the state’s largest-ever apartment complex sale, passes the sale of Horizons at Rock Creek in Superior, which sold for $255 million.

When Horizons at Rock Creek sold in 2015, the Business Journal quoted the 2006 sale of Breakers Resort as the second-highest apartment sale in the state’s history. But now, Breakers has once again taken the top spot, selling for nearly $100 million more than Horizons at Rock Creek, and at an increase of 84 percent over its 2006 dollar figure.

Few other property sales in Colorado have been worth more, including the 2012 sale of the Cash Register building in downtown Denver for $387 million.

And when the owners of the state’s tallest building, Republic Plaza, sold a 50 percent stake in the property in 2014, the 56-story building was valued at $480 million.