Playa Vista-based DB Capital Management continues to make out-of-state acquisition moves in one of its biggest markets: Denver.
DB Capital acquired its second multifamily asset in the Denver metro area in the last month with the purchase of Gardens on Paris, a 149-unit apartment community in Aurora, Colo., for $24.6 million.
In the last 12 months, the firm has added nearly 500 units to its local portfolio.
“Housing affordability continues to be a major issue in Denver,” Brennen Degner, chief executive of DB Capital, said in a statement.
DB Capital plans to rebrand the property and implement a $3.3 million capital improvement program to modernize the complex. Gardens on Paris is located directly adjacent to the Fitzsimons Life Science District, a 578-acre campus. DB Capital started buying out of state in late 2017.
“The primary driver was we bought six or seven deals in Los Angeles,” Degner said. “Most of them were in West Hollywood, Koreatown and Santa Monica. We got headwinds of red tape. We decided to pivot because the investment environment was a challenge to raise capital. We saw additional rent control on the horizon.”
For Degner, it made sense to diversify into more pro-landlord markets.
Denver, Austin, San Antonio and Salt Lake City became DB Capital’s major markets.
At the onset of the pandemic, as capital investors hit pause, DB Capital hesitated as well. But that phase did not last long.
“We were actively looking,” Degner said. “We thought there would be opportunity. In the last part of 2020, we purchased what are some of the best buys in our portfolio.”
For DB Capital, the impact of Covid was very market specific wiht L.A. and Portland assets suffering.
“We’re still trying to follow up on collections from six months ago. That really furthered our move out of those coastal markets,” Degner said.