News From DB Capital
DB Capital Management (“DB Capital") has closed on the recapitalization of Ascent at Union Square in Provo, UT, a 139-unit garden style community acquired by the Denver-based multifamily investment firm in December 2020.
Over the past two years, DB Capital invested in a multimillion-dollar capital improvement program repositioning the 1990’s vintage property to compete on price with newer product in the area. Enhancements included the renovation of unit interiors, a new two-story on-site fitness center, upgrades to the pool and barbecue area, new landscaping and a complete refresh of the building exterior.
“Despite the challenging market, we were able to achieve investor returns that were considerably ahead of original projections,” said DB Capital Co-founder and CEO Brennen Degner. “Given the current market conditions it made more sense to recapitalize and stay in the asset rather than sell into a depressed market, especially given very strong property performance. We wanted to continue our ownership of Ascent because of what we see as superior long-term growth prospects, a view which is shared by our new partner.”
The recapitalization replaces syndicated equity with an institutional equity partner. The partnership plans to further enhance the community’s competitive position in the Provo market by improving building systems and amenities.
Ascent at Union Square is located at 424 North 300 East, less than a mile from Brigham Young University. The property features a mix of one- and two-bedroom floorplans, covered parking and a first class amenity package.
Rawley Nielsen, Mark Jensen and Darren Nielsen of Colliers represented both parties in the transaction.
Cameron Chalfant and Brian Eisendrath of Institutional Property Advisors’ Capital Markets team facilitated the agency financing execution.
Multifamily investment firm DB Capital Management (“DB Capital”) has made its entry into the Las Vegas market with the $64 million acquisition of the Boulevard, a 296-unit apartment community located just 20 minutes from the Las Vegas Strip.
The Boulevard, which will be rebranded as Summit on Nellis, offers one-, two- and three-bedroom floorplans with an average unit size of 878 square feet and comes complete with a plethora of community amenities, including a fitness center, a swimming pool, a dog park, a modernized resident clubhouse and leasing office, and 48 detached garages.
The acquisition of The Boulevard represents a compelling value-add opportunity for DB Capital, which plans to execute an extensive capital improvement plan that will upgrade all the apartment homes to premium level. In addition, there will be an upgrade of the common areas and building exteriors to further increase the property’s curb appeal. When complete, Summit on Nellis will be on par with the competitive set in the area but at a more attractive price point.
“The Las Vegas rental market continues to benefit from very favorable supply and demand dynamics as well as ongoing in-migration of people seeking relative affordability when compared to West Coast markets,” according to DB Capital CEO Brennen Degner. “We are committed to building out a substantial portfolio in the Las Vegas MSA, with a goal of $200 million over the next 24 months.”
Located at 3050 S Nellis Blvd., the Summit on Nellis is located 15 minutes from downtown Las Vegas and Harry Reid International Airport and 20 minutes east of the Las Vegas Strip, Nevada’s largest employment center. Other large employers located in close vicinity to the property include the $2 billion Allegiant Stadium, the Sunrise Hospital and Medical Center, the Desert Springs Hospital Medical Center, Union Village Integrated Healthcare Campus, and the booming industrial/e-commerce sector in northern Las Vegas. From July 2021 through July 2022 Las Vegas experienced job growth of 6.3 percent, the seventh highest employment growth in the nation.
“With the addition of new resorts, the Raiders stadium, and the rapid rise of Las Vegas as a sports mecca, Las Vegas' job market is not only strong but is also quickly expanding, driving the city's continued growth which led to a robust demand for multifamily apartments,” DB Capital Regional Vice President Chase Yim said. “As a result of population growth and a rise in employment in a variety of industries, including healthcare/medicine, leisure/hospitality, and warehouse/logistics, Las Vegas is expected to remain a strong market for years to come.”
Dekel Capital arranged $45.8 Million in bridge acquisition financing through UBS. According to Dekel Managing Principal Shlomi Ronen, “seeing the volatility in the debt markets we focused our efforts on sourcing the loan from a strong balance sheet lender that had lending capacity to not only fund this loan but as well fund future loans for DB.”
This transaction was purchased in a joint venture partnership with Cottonwood Group, who is based out of Los Angeles. Spencer Ballif, Adam Schmitt and Jannie Mongkolsakulkit of CBRE’s Las Vegas office represented the seller in the transaction.
News From DB&R Marketing Communications, Inc.
For Immediate Release
Multifamily investment firm DB Capital Management (“DB Capital”) continues its investment activities in Utah with the acquisition of Spring Hollow, an 88-unit apartment complex in Millcreek, UT, an affluent suburb of Salt Lake City.
The acquisition of Spring Hollow caps approximately $100 million of transaction activity for DB Capital in Salt Lake City over the past 12 months. Its third acquisition during that period, the firm also exited five investments, some of which date back to when the firm entered the market in 2018.
Millcreek is located less than 15 minutes from Downtown Salt Lake City to the north and less than 30 minutes from the Silicon Slopes to the south, two of the most important employment hubs across the Wasatch Front. Served by the nearby UTA Trax Murray North Station, which provides access throughout the Salt Lake City Metro, Provo and Ogden, Spring Hollow is within close proximity to entertainment areas such as Commons at Sugar House and Fashion Place Mall. It is also is within 30 minutes of five of the most popular ski resorts in Utah.
DB Capital plans an extensive renovation of the entire community which has largely remained untouched since it was constructed in 1973. Improvements will exceed $40,000/unit and include replacement of cedar shingle mansard roofs, new exterior paint, the addition of a brand new leasing office, a large indoor/outdoor fitness center, basketball court, dog park, and an activated courtyard area with games and seating situated around new fire pit and BBQ areas. Each of the community’s 88 two-bedroom, one-bath units will be updated as units become available with quartz countertops, stainless steel appliances, in-unit washer/dryer, new plumbing and lighting fixtures, and new cabinets.
“Salt Lake City was one of the first markets we invested in as a company and we seem to have found a great niche in these types of middle market opportunities,” said Devin Antin, Managing Partner of DB Capital. “The Salt Lake City multifamily market is one of the most, if not the most, fundamentally sound in the United States with strong population and job growth and was our best performing market throughout the pandemic. We have a great reputation as a closer in this market and we were lucky to be in a position to make a pre-emptive strike on this deal. The relationships we have built over years of activity have put us in a position to do well long-term and continue to grow our platform in Salt Lake City.”
The multifamily market in Salt Lake City continues to thrive, as it saw a 2.4% rent increase in 2020 in spite of the emergence of the COVID-19 pandemic, compared to many other metro areas which experienced flat or negative rent growth during the same period, according to Darren Hulick, Regional Vice President in charge of overseeing DB Capital’s market presence in Salt Lake City, Denver and Portland.
“Given the property’s park-like setting nestled directly up against Big Cottonwood Creek, it will be attractive to renters looking to escape the higher density podium developments that make up a majority of the new options for renters,” said Hulick. “With Salt Lake City’s supply growth having a heavy concentration in high density projects in the urban core, coupled with rising land and construction costs, we see tremendous opportunity in acquiring low density garden-style assets at a significant discount to replacement cost and improving them to a point that their rents can draft off more costly new construction.”
The property was 98% occupied at the time of closing and DB Capital expects the renovation timeline to take approximately 16 months to complete.
Jason Wadsworth of Wadsworth Multifamily represented both buyer and seller in the transaction. Additionally, Arbor Realty Trust provided the first trust deed which was arranged by Marc Belsky of Marc Belsky Ltd.
Multifamily investment firm DB Capital Management has made its largest investment in Austin, TX with the acquisition of a three-property apartment portfolio totaling 422 units.
The properties located in North Austin were built between 1980 and 1984 and range in size from 130 to 160 units. Each is located within a 1.5-mile radius from one another at 1200 Mearns Meadow, 1804 Rundberg Lane and 1735 Rutland. Occupancy across the portfolio was 95% at closing.
Since entering the Austin market in 2018 DB Capital Management has grown its local portfolio to 724 units with plans to continue to build scale over the next 12-18 months, according DB Capital Management Vice President of Acquisitions, Hunter Graul who heads the firm’s Austin, TX office.
“The portfolio’s proximity to our other assets in North Austin, combined with our growing influence in the market, provides us an opportunity to achieve synergy through economies of scale,” said Graul. “We are bullish on the long-term outlook for Austin, particularly North Austin, which is one of the last remaining affordable suburban infill markets in the city. We will continue to seek compelling opportunities and plan to increase our portfolio in the market with a goal of acquiring an additional 500 to 1,000 units over the next year-and-a-half.”
After curing substantial deferred maintenance issues DB Capital will begin a multimillion-dollar capital improvement program across the portfolio, which will include exterior renovations and a complete amenity overhaul, with the addition of playgrounds, dog parks and new landscaping. Unit interiors will also receive significant upgrades including stone countertops, updated plumbing and lighting fixtures, new cabinet fronts, and new vinyl plank flooring and carpets. Renovations, which will be made as units roll, are expected to be completed over the next two years.
Over the past two months, DB Capital Management has acquired approximately $100 million in multifamily assets located in selected high-growth markets in the Western United States, having recently closed on assets in Denver, CO and Provo, UT.
“We have a robust pipeline of deals and are expecting to close on our next multifamily property in Salt Lake City later this quarter,” added company Co-founder and CEO Brennen Degner.
Michael Wardlaw, Charles Cirar and Colin Cannata of CBRE marketed the property on behalf of the seller.
Multifamily investment firm DB Capital Management has closed the acquisition of Union Square Apartments, a 139-unit community in Provo, Utah, for $16 million.
While DB Capital Management currently owns approximately 300 units across multiple properties in Salt Lake City, Union Square Apartments, located at 424 North 300 East, is the company’s first investment in Provo.
In 2018, The Milken Institute ranked Provo as the “best performing economy among big U.S. cities,” and it has been in the top three for five years. Between 2014 and 2019, the Provo and Orem metro area saw 20% job growth.
DB Capital Management has been investing in secondary and tertiary markets since it was founded in 2017 and Union Square Apartments is a continuation of that strategy. As people have left major coastal cities for more space and affordability, this investment approach is gaining popularity among other investors.
“Our first investments were in Utah more than three years ago and the state remains one of our primary investment targets,” said DB Capital Management Managing Partner and Co-Founder Devin Antin. “We will continue to build scale in Provo and Salt Lake City with a goal of increasing our holdings to more than 1,000 units by the end of 2022.
Union Square Apartments, built in 1991, consist of four two- and three-story buildings and one single-family home. Common area amenities include swimming pool, on-site laundromat, barbecue areas and covered parking. The property, which is 99% occupied, sits three blocks from Brigham Young University (BYU).
“Union Square Apartments represents a unique opportunity to acquire a 1990s vintage asset at a significant discount to replacement cost in one of the highest performing student submarkets in the nation,” added DB Capital Management Co-Founder and CEO Brennen Degner. “Union Square is one of the closest apartment properties to BYU’s campus making it one of the best options for married students, which represents 30 percent of the 33,000 students attending the university. Union Square enjoys an unbeatable market position within the Provo housing market.”
DB Capital Management plans to increase NOI at Union Square through a hands-on management approach and drive prospective renter volume through a targeted marketing plan that includes capital improvements to the common areas, and unit and exterior upgrades to bring the property up to market standards.
DB Capital Management acquired the property in an off-market deal, leveraging relationships from previous deals to secure the asset.
Multifamily investment firm DB Capital Management has closed the acquisition of Red Owl Apartments, a 46-unit community in Denver, CO for $16.2 million, marking the firm’s entry into the Denver market.
DB Capital Management plans to aggressively target multifamily acquisitions in Denver as it continually ranks as one of the best places to live in the U.S. and has been one of the top performing multifamily markets during the COVID-19 pandemic, according to DB Capital Management Co-founder and CEO Brennen Degner.
“We are targeting extensive growth in this market with a goal to own 1,000 units in the Denver metro area by the end of 2022,” said Degner, who was born and raised in Denver. “Red Owl is an award-winning asset in an exceptional location that we were able to acquire below replacement cost. We have the ability to increase revenue through hands-on property management and a focused renovation plan.”
Built in 2018, Red Owl Apartments is located at 90 S. Logan Street in West Wash Park, one Denver’s most livable and sought-after residential neighborhoods. West Wash Park is characterized by its eclectic mix of housing options as well as a wide variety of local restaurants, boutiques and parks. The approximately one-square mile neighborhood sits at the western gateway of its namesake 165-acre Washington Park, considered by locals to be Denver’s Central Park. It is also within a 10-minute drive of the city’s most popular shopping and business districts including Old South Pearl Street, Cherry Creek, Old South Gaylord Street and Downtown Denver.
DB Capital Management will rebrand the asset as Summit at Wash Park and will immediately begin a renovation that will include common area improvements, as well as interior and exterior upgrades to the studio, one-, two- and three-bedroom apartment homes as units roll. The improvements are aimed at driving desirability and tenant retention to support stable revenue growth, added Regional Vice President Darren Hulick who leads the Denver acquisition team.
“The current rents demonstrate a sizeable spread against new luxury product in the market and provide renters with an affordable, upscale option in one of Denver’s most desirable neighborhoods,” said Hulick.
The off-market transaction was arranged by Justin Hunt, Andy Hellman and Katie Hufnagel of Newmark Knight Frank, Colorado. David Treadwell of Newmark Knight Frank arranged the acquisition financing.
In addition to Denver, the firm is also targeting multifamily investments in Austin, Salt Lake City, and Portland.
