L.A. based Orion Real Estate Partners (“Orion”) is pleased to recap its successful 2019 with two dispositions of apartment communities totaling $45.2mm and three acquisitions totaling $47.8mm, including the formation of its first Opportunity Zone Fund. These transactions increased Orion’s presence in its targeted markets of Denver, Austin, and San Antonio.
Dispositions
Lamar Station Apartments, Lakewood (Denver) CO – Orion successfully sold Lamar Station Apartments in the fourth quarter of 2019 after a 38-month hold. The Property was a 138-unit apartment community located in Lakewood, Colorado, a desirable western submarket of Denver. Immediately after acquiring the property in June 2016, Orion upgraded the exterior and common areas to improve curb appeal, implemented institutional property management and initiated a unit interior renovation program that resulted in net operating income increasing by more than 35%. The sale price was 56% higher than the all-in cost basis and Orion ultimately produced a project level IRR of 64%.
Azure Apartments & Townhomes, Austin TX – Orion successfully sold Azure Apartments & Townhomes in the fourth quarter of 2019 after a 22-month hold. The Property was a 199-unit apartment community located in Austin, Texas and was in dire need of capital upgrades and fresh active management. Orion implemented a $2.0mm repositioning strategy over the first 18-months that included all new branding, new signage, exterior paint, the installation of a community soccer field, a resident BBQ area, unit interior upgrades, and significant landscape improvements. As a result, net operating income increased 25% from acquisition and Orion executed a sale more than 40% higher than the original purchase price (22-months prior) resulting in a project level IRR of 21%.
Acquisitions
Eagle Crest Apartments, Lakewood CO – Orion purchased the 93-unit apartment community in January 2019 and plans to invest approximately $1.5mm in interior and exterior improvements. Built in 1960, the garden-style apartment community is located in the Lakewood/Wheat Ridge submarket, a desirable West Denver infill location surrounded by amenities and close to major employment hubs, entertainment, and transportation. Eagle Crest is well-positioned to cater to an underserved workforce renter population that has been priced out of newer properties in the market. Orion plans to improve the property’s amenities and renovate the unit interiors. Orion assumed an existing loan and originated a supplemental loan with Freddie Mac through Grandbridge Real Estate Capital. The coterminous loans are interest only with five years of term remaining. Apartment Management Consultants (“AMC”) has been engaged to provide property management services on behalf of Orion.
14th & Jay, Lakewood CO – Orion successfully formed its first Opportunity Zone Fund for the development of a 33-unit apartment community located in Lakewood, Colorado. The Transit Oriented Development located between Colfax Avenue and the West Light Rail Line will consist of 33-units averaging 640 square feet offering luxury interior finishes. The Property will offer one- and two-bedroom apartments to serve the primary resident demand in the area as 75% of the submarket consists of one or two person households. There will be 2,400 SF of open space on the second floor providing an outdoor resident lounge. Orion Real Estate Partners engaged a local Denver architecture firm, Sprocket Design Build, to provide architectural and project management services.
The Hill at Woodway, San Antonio TX – Orion purchased the 248-unit apartment community in December 2019 and plans to invest approximately $2.2mm in interior and exterior improvements to further reposition the property and take advantage of its prime location within the submarket. The Property benefits from unique floorplans such as 32 units with loft style layouts, 56 units with highly desirable open kitchen layouts, and washer/dryer connections in each unit. The Property is located within the Northwest submarket of San Antonio close to the South Texas Medical Center (30k jobs) and USAA (18k jobs). Apartment market fundamentals in Northwest San Antonio continue to strengthen due to increased population growth and strong demand for quality housing options. According to Apartment Insights, Class B properties in the immediate vicinity have experienced rent growth of 7.7% in the past year and 10.3% growth in the past two years. Rental rates at properties located in the immediate area surrounding The Hill at Woodway continue to outpace the growth of those in the greater San Antonio metro. CBRE Multifamily Capital provided an attractive 10-year fixed rate acquisition loan through Fannie Mae and Orion engaged United Apartment Group (“UAG”) to provide property management services.
Orion Real Estate Partners is a private real estate investment firm with offices in Los Angeles, Denver, and Austin.
Orion targets value-add multifamily assets in select Western US markets with strong demographics and job growth. Utilizing proven institutional processes to source and manage investments, we identify assets with capital and operational repositioning opportunities to provide attractive returns for our investors.
