The Windtree Apartments, above, which have 260 units in 34 buildings, were built in 1986. The Sterling Pointe Apartments, below, have 496 units in 50 buildings and were built in 1984.

Colorado Springs might have just made headlines as one of the “best places to live,” but based on this week’s $56.5 million purchase of a real estate portfolio that includes the Sterling Pointe and Windtree apartments, the city’s appeal is common knowledge among real estate investors.
The sale represents the largest transaction for multifamily properties ever recorded in Colorado Springs. The next largest transaction was the $37.7 million sale of a three-property Colorado Springs apartment portfolio by Equity Residential in 2000, followed by the $35.3 million single-complex sale of Champions at Nor’Wood Apartments in 2004.
Doug Carter of Sperry Van Ness represented the buyer, Weidner Investment Services of Kirkland, Wash. The seller, Maryland-based Klingbeil Capital, represented itself.
Colorado Springs is one of five markets in which Weidman Investment Services owns apartments. The firm manages or controls more than 19,000 rental units in 49 states.
The local complexes have a total of 756 units and are 97 percent occupied, Carter said. The transaction was not only Colorado Springs’ largest apartment sale, but it also represents the highest price per unit paid locally for buildings constructed during the 1980s, with the exception of condo conversions.
The Sterling Pointe Apartments were built in 1984. There are 496 units in 50 buildings. The gated community is on 21 acres and includes two outdoor pools, one indoor pool, tennis courts, a home theater, aerobics room, fitness center, indoor hot tub, volleyball court and roller hockey court.
Built in 1986, the Windtree Apartments consists of 260 units in 34 buildings. Situated on 12 acres, its amenities include a heated pool and hot tub, as well as a 24-hour exercise room and sauna. Other features include wood-burning fireplaces, laundry hook-ups and furnished studio apartments.
Carter said that the communities’ high occupancy rates and well-maintained facilities were prime motivators for the buyer.
As the publisher of a quarterly Colorado Springs Apartment Market analysis, Carter keeps his finger on the pulse of the multifamily industry.
So far this year, he reports, the city has seen $151 million in multifamily properties sold.
“We’ve already beat last year’s $144 million sales total and will likely surpass the $194 million in sales closed in 2004,” Carter said. “I think we will exceed $200 million by year end.”
Carter views the market as almost “schizophrenic,” noting that well-maintained properties like Sterling Pointe and Windtree continue to draw investor interest, while older units are experiencing longer sales cycles.
With sales activity moving toward record levels, rental rates remain “soft but showing improvement,” Carter said. Troop deployments, rising interest rates, a decrease in new home building permits, an increase in foreclosures and other economic factors all affect rental activity.
In his June report, Carter calculated the local vacancy rate at 9.4 percent, down from 9.8 percent during the first quarter and 10.8 percent during the fourth quarter of 2005.
Those figures were supported by Colorado Department of Local Affairs officials who in May published a statewide Multi-family Vacancy and Rent Survey for the first quarter 2006.
“What we are seeing is a slow and steady increase in the absorption of new units,” Colorado Division of Housing Director Kathi Williams said. “It looks like the rental market has stabilized, and we hope to see more of that in the future.”
Paul Turner of Turner Commercial Research agrees with both Carter and the state’s assessment. He points to the city’s national reputation as a great place to live as a boon to real estate investment.
“I was contacted by the Wall Street Journal this week about a story on the city,” he said. “Based on that kind of attention, I believe all real estate including Class A apartment properties will continue to sell. We’ve got strong employment and military deployments do not seriously affect vacancies in that tier of the market.”
Becky.Hurley@csbj.com