One of the largest affordable apartments in Aspen sells to national firm
The 148-unit Centennial rental apartment complex in Aspen’s east side neighborhood has been sold to an outside real estate investment firm for nearly $51 million.
Birge & Held, a national private equity, real estate investment, construction and management firm with offices in Denver and Indianapolis, closed on the property Thursday.
The seller was Centennial Aspen II Limited Partnership, of which Sam Brown is general partner and who developed the property in the 1980s.
The complex, which is effectively rent-controlled through deed restrictions, is home to more than 300 local residents.
Brown said Friday that it is bittersweet to sell the property.
“It’s an enormous sense of loss,” he said, adding his partners wanted to sell and reinvest in other real estate in Aspen. “This was a labor of love.”
Andrew Held, president and chief operating officer of Birge & Held, said Centennial blends in well with the company’s emphasis on providing affordable and workforce housing around the country.
“It’s a unique property in a unique location,” he said Friday. “It’s a great investment and we are excited to be part of the Aspen community and continuing Sam’s vision.”
Birge & Held plans on reinvesting in the complex with capital improvements.
“It’s a Centennial 2.0,” Held said, adding there is no timeline yet of when that will occur.
The property will eventually become free-market, based on approvals and conditions placed on it from Pitkin County commissioners in the ’80s.
Deed restrictions on the apartments expire at the end of the 21st year after the death of the last member of the Pitkin Board of County Commissioners, who approved the development. That individual is Old Snowmass resident Michael Kinsley who is in his early 70s.
Held acknowledged the uniqueness of the circumstances placed on the property.
“I’ve never seen anything like it,” he said.
The city of Aspen in December was set to buy the deed restrictions for $10 million but the deal fell through because the two sides couldn’t agree to terms.
Several years ago, Brown offered the city the chance to buy the property for $60 million, and had recently reduced that to $50 million, but the municipal government declined.
“I sold it for more than what I offered the city,” Brown said Friday.
If the city had bought the deed restrictions, rent prices would have been capped in perpetuity.
They still will be for quite some time, and that is central to Birge & Held’s business plan.
“The affordable housing crisis is going on everywhere, it’s not just Aspen,” Held said.
He added that the firm would have purchased the complex even if the city had purchased the deed restrictions.
Centennial is Birge & Held’s third acquisition in Colorado as it continues to expand its national footprint.
The firm specializes in multifamily real estate, primarily focusing on the Midwest, Western and Southeast markets.
Held said 90% of the firm’s units qualify as affordable.
Kim Keilin, the longtime property manager at Centennial, will stay on, along with the current property management team, Held said.
“We are excited to work with the team,” he said. “It’s nice to have a seasoned staff.”
Held acknowledged that acquiring a property like Centennial during the COVID-19 global pandemic and resulting economic crisis is not the best timing.
He said he understands that many of the tenants, who are part of the local workforce, are currently out of jobs and paying rent will be challenging in the coming months.
The company plans to work with all of its tenants who are suffering the economic repercussions of the COVID-19 spread.
“A lot of it is state driven,” Held said, adding that company officials are dealing with that forecasting at all of their properties. “There could be some rockiness at the beginning but we are looking at the long view,” he said of Centennial.
Brown said he is pleased with the buyer, who he has known socially for years in Aspen.
“I think he’ll be a good steward,” he said. “He has a personal touch and he wants to be part of the Aspen community.”
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