By Jon Peterson
Denver-based Apartment Investment and Management Company has inked an agreement to be the buyer of the 463-unit Indigo apartment community located at 525 Middlefield Road in Redwood City. This is according to a public document that was part of the AIMCO’s second quarter 2016 earnings report.
The apartment REIT did not respond to several phone calls seeking comment for this story.[contextly_sidebar id=”O4Jw5j0extHoIQoyxc6dgP0tY9YGLJUW”]The buyer is planning to close on the acquisition once the construction of the asset has been completed. This is projected to occur by the end of the third quarter. AIMCO has leased 18 percent of the apartment homes at this point and rental rates are coming in at a rate that is higher than what the investor had underwritten in the transaction pro-forma. The first move-ins for the complex occurred at the beginning of July 2016.
AIMCO is buying Indigo from another Denver-based company, the Pauls Corporation. This company is building the project along with its equity partner, Mount Kellett Capital Management, a hedge fund manager with offices in New York City and Dallas. The development cost of the project was projected to be around $187 million. The project had a $121 million construction loan from Wells Fargo that was arranged by the CBRE Capital Markets’ Debt and Structured Finance team.
The new apartment complex is located in the downtown area of Redwood City. The city has plans for the future development of 2,500 residential units that can be a mixture of apartments and condos and 500,000 square feet of office space in the downtown area.
AIMCO is a national apartment owner and developer. The company has the San Francisco Bay Area as one of its targeted investment markets. Through the second quarter of this year, it owned six properties in this region totaling 1,202 units. The average daily occupancy on this portfolio for the same time period was 95.7 percent. On a nationwide basis, the company owns 108 properties totaling 33,214 units.