450-unit Colorado property heads to servicing

Core Insights - The Fairways at Lowry, a 450-unit workforce apartment property in Aurora, Colorado, has been transferred to special servicing due to the owner's failure to make payments in August and September 2024 [7] - Tower 16 Capital Partners, in partnership with Dune Real Estate Partners, purchased the property for $68.5 million in November 2020 and planned to acquire a portfolio of 2,000 units in the Denver area [7] - The property is facing challenges with rising insurance costs, which have increased by 68% from the underwritten figure, and a decrease in average rents in the Denver area by 3.7% year over year [5][6] Property Details - The Fairways at Lowry is located near the Lowry master-planned development and is 3 miles from Interstate 225 and 7 miles from downtown Denver [3] - Tower 16 planned $6.8 million in renovations, including upgrades to apartment units, a new clubhouse, gym, updated pool area, and outdoor amenities [4] Market Conditions - The Apartment Association of Metro Denver reported a decrease in average rents by $71 since Q2 2024 and $46 lower than the same period in 2023, indicating a challenging rental market for property owners [6] - The high supply of apartments in the Denver area has contributed to falling rents, impacting owners who had planned extensive property improvements to capture increased rent [5][6]