617k a Unit in Boulder

4 Replies

This complex sold for 24 mil or 617k a unit in Boulder. I wonder how this will be a profitable investment for these buyers?


http://bizwest.com/boulder-student-apartment-complex-sells-for-617000-per-unit/?utm_medium=email&utm_source=newsletteram&utm_term=2015-05-18

Rents would have to be a 6,200 a door to be at the 1% rent to sales ratio.

The article is a little misleading because if you go to their website it has individual student leases of 4 to a unit. Looks like one kitchen and then 4 beds and baths ( master suites ).

If that's the case then you would have a potential for 100+ rentals.

Well, it's Boulder, first of all.  (I can say that as I grew up there).  It's 25 square miles of beauty surrounded by reality.

But secondly, that building is prime location.  While it doesn't come close to meeting the 1% rule, as a long term investment, it will still cash flow all day long.  Student housing in Boulder is tough to find because they are squeezing more and more kids into that campus, but the lack of any ability to build in a meaningful way means that student housing is VERY expensive.  Essentially, kids are paying close to $1000 per bedroom/month in Boulder.  They've built as much into the Williams Village complex as they can and Boulder's anti-growth laws won't allow for anything significant to be built any more.

True, I am sure they have analyzed all aspects of this deal and it makes sense for them.  

Those numbers seem pretty comparable to what you would be paying for properties elsewhere on the hill in terms of student rentals.  Plus that location will always be considered prime.  It's definitely a nice building compared to what is around it.

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