A Durango apartment complex has sold for $14.5 million to a California venture capital firm.
Hillcrest Apartments, near Fort Lewis College and Hillcrest Golf Club, is Durango’s largest apartment development with 112 units.
The multifamily development was built in 2002 by Ed Lewis of Butte Properties of Scottsdale, Ariz. Lewis’ investment group, Club Durango, reached the agreement Jan. 15 with Virtu Investments, a firm based in the San Francisco area.
The transaction is the priciest multifamily deal in Durango in real estate records dating to 1997 and perhaps the largest local transaction of its type ever.
The only recent transaction to rival it was the sale last year of a Vallecito single-family home and ranch for $15 million.
“It’s interesting,” said John Wells, owner-broker of The Wells Group in Durango, who was not involved in the transaction. “We don’t catch the national eye often. We caught the national eye on this one.”
The high-dollar sale comes amid a tight rental market in Durango. The city had a vacancy rate of 4.4 percent during the third quarter of 2013, according to a Colorado Division of Housing survey. The average rent in Durango was $983.
Jamie Marquez, Lewis’ daughter and manager of the property before the sale, said Hillcrest’s occupancy rate exceeds 90 percent.
Rents at Hillcrest average $1,185, with an average size of 827 square feet, said Marquez, owner of Sterling Brokerage in Durango.
Historically, about 40 to 50 percent of Hillcrest tenants are students, she said.
“The perception is that it’s all students, but it’s never been all students,” she said. “We’ve had a really wide variety of professionals and families and people who want to be close to the bike trails, close to town.”
Tenants should not notice any immediate changes, Marquez said.
The apartment complex is next to the college, which enrolls about 4,000 students. The transaction does not include the portion of the development that was converted into Silver Peaks condominiums.
Erik Reif, Virtu’s acquisitions and dispositions manager, called Hillcrest Apartments a “very clean, strong asset.”
For Virtu, Durango’s lack of rental housing was part of the appeal.
“It’s a very supply-constrained market,” Reif said.
cslothower@durangoherald.com
