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Friday, October 7, 2016

(Denver, Colo.) — October 6, 2016 – One of Denver’s oldest and most venerable real estate developers, Koelbel and Company, along with its partner, nationally active value add multifamily owner The Bascom Group, LLC, announced the $350 million landmark sale of The Breakers Resort to Pensam Residential and its partners, BH Equities LLC and Wafra Capital Partners Inc.

The transaction was brokered by ARA Newmark in a deal that will restructure ownership and allow Koelbel and Company to maintain its involvement in the future of the community as a minority owner. The Freddie Mac financing was handled by Berkadia.

The Breakers property is one of the most dynamic apartment communities in Colorado and is the largest physical asset in metro Denver offering a nearly 190-acre site which spans 1,523 units among six villages, a privately owned lake and a 26,000-square-foot recreation center located within minutes of downtown Denver and Cherry Creek.

The Bascom Group previously acquired the Breakers Resort in June 2006 for a purchase price of $190 Million in a joint venture with Koelbel and Company and GE Capital. Bascom and Koelbel later recapitalized the property and acquired GE Capital’s interest in March 2013 with debt financing from Bank of America, CIBC, and Prudential. Sensing a recovering market, The Bascom Group entered the Colorado market back in June 2005 and since then has acquired 33 apartment communities totaling 11,714 units. In 2009, Bascom was recognized as the largest Denver multifamily owner with just over 10,000 units.

“Koelbel and Company has always prided itself on a long term vision of legacy communities that add to and enhance the fabric of where we live,” said Koelbel and Company President, Walter A. ‘Buz’ Koelbel, Jr. “Continuing our 26-year involvement with a community as unique as The Breakers certainly captures our philosophical approach.”

While The Breakers maintains its position as a unique and desirable asset, often referred to as one of Denver's premier multifamily communities, Pensam Residential and BH Equities have identified an opportunity for substantial value creation through modernizing and enhancing the amenities at the property. In order to accomplish these rehabilitation efforts, the companies will implement a sizable capital improvement program to include re-purposing of several individual community clubhouses as well as a complete retrofit of the Catamaran Club, Riviera Cafe, and the Marina.

"The Breakers occupies a prime infill location in a Millennial-driven submarket and buyer activity was greatly increased due to the property being a prime candidate for a value-add strategy.” stated Terrance Hunt of ARA Newmark. "The Breakers is simply unmatched in its size, scope and standing as the only community with a private lake and virtually endless amenities."

“This transaction allows us to deploy capital into a growing market and stable asset while delivering strong current yields to our investors with upside for capital appreciation over time,” said Michael Gontar, Chief Investment Officer of Wafra Capital Partners Inc. “We are excited to be building on our longstanding and successful relationship with Pensam Residential and BH Equities, as well as having the opportunity to work with Koelbel and Company.”

The Denver market is seeing job growth above both the state and national averages, and Denver is an economic hub for the central United States and home to large corporations such as Lockheed Martin, United Airlines and Charles Schwab. Rapid population and employment growth will continue to fuel demand for highly-skilled professional jobs in the coming years. As a result, the Denver multifamily market should remain one of the strongest performers in the United States.

“We are delighted that Koelbel and Company, original co-developer of The Breakers beginning in 1989, will remain a minority partner with continued input on the strategic vision for the future of the community," said Michael Stein, Founding Partner of Pensam Residential.

“This is a truly unique opportunity to build value through unique amenity and service offerings like those of no other apartment community,” said Harry Bookey, Founder and CEO of BH Equities, LLC.

Paul Zakhary, Director for Bascom, commented, “The 10+ year hold of The Breakers Resort gave Bascom an amazing run in Denver and will certainly be one for the books for both its unique characteristics and execution of the sale from all parties involved.”

ARA, a Newmark Company represented the seller on The Breakers Resort in Denver, the country's second most valuable multi-housing trade to date in 2016 and the largest apartment deal in Colorado history. ''The sale of the Breakers is among the highest in the United States for multi-housing in 2016, second only to a sale in Manhattan. Sixteen years ago, large, national investment groups would not have invested even $100 million in Denver,” explained Jeff Hawks of ARA Newmark. “Today, the city has truly captured the attention of these investors and is now competing with coastal markets. In fact, we received over 20 offers, and the key was finding a buyer who thoroughly understood the future opportunity and the operations of the property.

About Koelbel and Company:

Founded as a residential brokerage company in 1952 and now a full-service real estate company with developed properties spanning from Vail and Winter Park to Louisville and Denver, Koelbel and Company has helped change the face of the Centennial State. Now in its third generation, the family owned Koelbel and Company continues to place its indelible mark on the Colorado landscape with developments that blend ageless values with pacesetting design. For more information visit www.koelbelco.com.

About The Bascom Group:

Bascom is a private equity firm specializing in value-added multifamily, commercial, non-performing loans, and real estate related investments and operating companies. Bascom sources value-added and distressed properties including many through foreclosure, bankruptcy, or short sales and repositions them by adding extensive capital improvements, increasing revenue, and reducing expenses by realizing operational efficiencies through implementation of institutional-quality property management. Bascom, founded by principals Jerry Fink, David Kim, and Derek Chen, is one of the most active and seasoned buyers and operators of apartment communities in the U.S. Bascom has completed over $12 billion in multifamily and commercial value-added transactions since 1996 including more than 299 multifamily properties containing over 79,000 units. Bascom has ranked among the top 50 multifamily owners in the U.S. Bascom’s subsidiaries and joint ventures include the Southern California Industrial Fund, Rushmore Properties, Bascom Portfolio Advisors, Shubin Nadal Associates, Spirit Bascom Ventures, REDA Bascom Ventures, MHF RM Holdings, Bascom Northwest Ventures, Bascom Arizona Ventures, Harbor Associates, Village Partner Ventures, and the Realm Group. Bascom’s subsidiaries also include Premier Business Centers, the largest privately held executive suite company in the U.S. For additional information, please visit www.bascomgroup.com.

About Pensam Residential: 

Pensam is a multi-housing owner and operator which manages a growing portfolio of properties across the United States. Pensam encompasses all aspects of real estate property ownership and investment, including acquisition, financing, construction, repositioning, and management. Pensam has acquired over 20,000 units across more than 75 properties. For more information, visit www.pensamresidential.com 

About ARA, A Newmark Company

ARA, A Newmark Company (ARA Newmark): ARA, A Newmark Company (ARA Newmark) is the largest full-service investment advisory firm in the nation that focuses exclusively on the brokerage, financing and capital sourcing of multihousing properties including conventional, affordable, distressed assets, notes sales,
seniors, student, manufactured housing and multihousing land. ARA Newmark comprises the country's top investment professionals who leverage a unique and fully integrated cooperative business platform of shared information, relationships and technology driven solutions. ARA Newmark's unified enterprise approach ensures that clients are delivered the broadest asset exposure, effective matching of buyers and sellers, and the shortest transaction timeframes in the industry. The combination of global resources, unparalleled market expertise and nationwide presence in the multihousing marketplace has resulted in an annual production volume of more than $13.7 billion in real estate transactions in 2015. For more information on the sale of The Breakers, please contact Jeff Hawks at 303-260-4406 or Terrance Hunt at 303-260-4477.For detailed information on ARA Newmark's extensive multihousing investment services, visit www.aranewmark.com.

About BH Management:

BH Management’s roots date back to 1993, when founder Harry Bookey formed the company with a roster of just five apartment communities. Today, Mr. Bookey continues to lead the firm, serving as inspiration for its 1,500-plus employees. The company now surpasses $600 million in revenues annually, operating over 65,000 units in 22 states.

About Wafra Capital Partners:

Wafra Capital Partners Inc. (“WCP”) is a New York-based SEC-registered investment adviser formed in December 2010. WCP is managed primarily by members of the former Structured Finance and Business & Product Development divisions of Wafra Investment Advisory Group, Inc., an affiliate of WCP founded in 1985. WCP’s advisory services principally focus on structuring and advising investment vehicles which invest in the structured finance, including equipment leasing and asset-based finance, and real estate arenas in the form of debt and other financial instruments. WCP currently has over $3.9 billion of commitments and assets under management. For more information, visit www.wafracapital.com