The Magnolia Real Estate Fund and TruAmerica Multifamily have acquired Thornton, Colorado-based Fox Creek, an apartment community. The value of the transaction was $53 million.
Los Angeles (May 1, 2017) —TruAmerica Multifamily and the Magnolia Real Estate Fund (“Magnolia”) have acquired Fox Creek, a 287-unit apartment community in Thornton, CO in an off-market transaction valued at $53 million. Fox Creek is the sixth multifamily investment in the Denver area for TruAmerica where the firm has acquired approximately 3,000 units in the past three years.
Built in two phases, starting in 1984 and completed in 1999, Fox Creek features a mix of large one-, two- and three-bedroom units in a low-density park-like setting. The 19.5-acre property includes two resort-style swimming pools, clubhouse with 24-hour fitness center, playground, dog park and spa and bike shop.
“Fox Creek represents a true value-add opportunity as the majority of the units, which feature vaulted ceilings, fireplaces and full size washer/dryers, have been largely untouched,” said Greg Campbell, Senior Managing Director of Acquisitions and Dispositions for TruAmerica. “About a quarter of the units also have lofts, an attractive feature not found at other assets in the immediate area. At our cost basis, we can implement a comprehensive and thoughtful renovation plan that will allow Fox Creek to compete with newer properties in the area and still be affordable to working families.”
The renovation will begin with improvements to common areas, including the pools and pool decks, clubhouse, fitness center, signage, and landscaping to enhance the property’s curb appeal. TruAmerica will then begin a custom interior renovation program beginning with vacant units and continuing as units turn over so as not to displace current tenants. Apartment upgrades will include all new stainless-steel appliances, new bathroom countertops and cabinets, faux-wood vinyl flooring in living areas, fresh paint and accent walls, and upgraded plumbing fixtures.
Fox Creek is located at 12220 Colorado Boulevard in Thornton, a bedroom community approximately 10 miles north of Denver boasting strong rental fundamentals. Construction activity in the northern Denver submarkets has been limited compared to the overall metro Denver construction pipeline of more than 23,000 units. Just 2,564 units are being added over a large geographical area in northern submarkets, which encompass Thornton, Westminster and Arvada. The Thornton submarket enjoys strong apartment demand, as families with children prefer this community to Denver because of its highly rated ADAMS 12 School System and affordable rents. Fox Creek is especially attractive because it is within an easy walk of retail amenities, nearby employment centers and Denver’s new RTD Eastlake Station, which will be completed in 2018. This rail station will serve the northern extension of Denver’s light-rail system to provide quick transit from Thornton to the urban core.
Fox Creek is the first investment for the newly launched McLean, VA-based Magnolia Real Estate Fund.
“The Fox Creek property presents an attractive opportunity to invest in a well-located asset at a discount to replacement cost in one of the most fundamentally sound rental markets in the nation,” said Magnolia Managing Partner David Kent. “Most importantly, in TruAmerica we have a partner with a successful track record of creating value and delivering appropriate risk adjusted returns to its partners.”
TruAmerica and the private seller were represented by David Potarf and Dan Woodward of CBRE. TruAmerica financed the acquisition through Freddie Mac’s select sponsor program arranged by Brian Eisendrath’s LA-based CBRE team.
About TruAmerica Multifamily
TruAmerica Multifamily is a vertically-integrated, value-add multifamily investment firm based in Los Angeles. Founded in July 2013 as a joint venture between Robert Hart and The Guardian Life Insurance Company of America, TruAmerica has been one of the country’s most active multifamily investors and manages a $6.6 billion portfolio of approximately 32,000 units across prime locations throughout Northern and Southern California, Washington, Oregon, Colorado, Arizona, Nevada, Utah and Maryland. For more information on TruAmerica Multifamily, visit www.truamerica.com or call (424) 325-2750.