The Ensley is a ground-up multifamily development located in downtown Colorado Springs, Colorado, which is seeing a vibrant transformation as a welcomed, affordable alternative to Denver. The city continues fostering growth by providing tax incentives to developers and for this project, they have agreed to a 75% reduction in incremental real estate taxes over the next 15 years. This is the equivalent of approximately $2.9 million in city support. The 277-unit, Class A property will cost $89.1 million to build and will offer high-class amenities such as a clubhouse, fitness center, pool and courtyard, as well as a six-story parking garage. This is Origin’s second deal in Colorado Springs and once again we have partnered with Greystar Real Estate Partners of Charleston, S.C.
Key Deal Points
Our joint venture partner, Greystar, is one of the largest multifamily developers in the world, sponsoring more than $15 billion of development projects, with a strong track record and balance sheet. Greystar is a vertically integrated firm that plans, builds and manages Class A multifamily projects in premier cities across the United States.
The project benefits from a pre-approved tax increment financing (TIF) package from the City of Colorado Springs. The TIF provides a 75% abatement of property taxes over the next 15 years, which equates to a present value of $6.3 million in tax savings.
Once completed and stabilized, the project will immediately be refinanced, returning between 25% and 35% of invested capital to investors, and will continue to deliver annual cash flow between 7% and 9% of invested equity.
Colorado Springs is located approximately seventy miles south of Denver and was recently listed as the most desirable place to live in the country by U.S. News & World Report.
Colorado Springs is ideal for real estate investors, the past several years have seen employment growth, wage growth, and rent growth that has outpaced the national average, all while offering lower cost of living.