A Southern California real estate firm has surrendered a large RiNo apartment complex it bought in 2021 to its lender, indicating that distress seen for years in the office sector is starting to spill over into the multifamily sector.
An affiliate of Sares Regis Group executed a deed-in-lieu of foreclosure Wednesday for the 301-unit Waterford RiNo building at 2797 Wewatta Way in Denver, according to public records.
The firm gave ownership to an affiliate of Chicago-based Heitman, which lent Sares Regis $91 million when the firm bought the building. Sares Regis paid $123 million, or $409,000 a unit, records show.
The five-story complex was completed in 2012 and was originally known as Marq at RiNo.
Sares Regis did not respond to requests for comment Wednesday. The company said upon buying the building that it planned to make upgrades to unit interiors and common areas, including the pool and fitness center.
Denver’s office sector has seen numerous foreclosures and deeds-in-lieu in recent years for buildings such as downtown’s Denver Energy Center and Market Center. Civic Center Plaza, at 1560 Broadway, was surrendered to Heitman in November 2024.
But Waterford RiNo appears to be the first such transaction in recent years for a major Denver residential property.
A handful of smaller residential properties have landed in earlier stages of distress in recent weeks.
A lender owed $14 million initiated foreclosure proceedings on 2617-2667 W. Evans Ave. and 1065-105 S. Quivas St. in Denver in September, records show. The Arium Apartments building at 6980 Stuart St. in Westminster landed in foreclosure last month.
Denver landlords have been squeezed in recent months by an influx of new supply, which has pushed rents down and rent concessions to a 15-year high, according to the Apartment Association of Metro Denver. The sector is also affected by the high interest rates that have touched all sectors of real estate, making it harder to refinance.
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