Gallery Flats sells to Arizona buyer for $18M

LOVELAND — A nearly full apartment complex that helped drive downtown redevelopment about five years ago has sold to out-of-state investors for $18.05 million, Larimer County Assessor records show.

The seller was Gallery Flats LLC, a partnership of brothers Kevin and Scott Hearne. Their LLC bought the three-story multifamily layout in 2017 for $11.2 million from Fort Collins-based Brinkman Partners and Salt Lake City-based Woodbury Corp.

Brinkman bought the land for $200,000 and broke ground on the project in 2013, and Gallery Flats was an early entry in the revitalization of the downtown, which included a multi-use, $60 million development of several city blocks into the Foundry.

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The 66-unit complex at the corner of North Lincoln Avenue and East Fifth Street has studio, 1-, 2-, and 3-bedroom units and is 95% full, according to Apartments.com.

Gallery Flats has retail on its first floor as does Lincoln Place next door to the east. Just south of the apartments and across an alley is the Loveland Museum. Area redevelopment continues: A building east of the museum, the former Reporter-Herald building, is said to be getting some refurbishment.

Brothers

The Hearne brothers are retired from the construction business. “We moved from [building] single-family homes to multifamily,” Kevin Hearne said. “The last one we built and kept, then sold.”

Brooklyn Park Rowhouses, 105 townhomes in Fort Collins with models named for neighborhoods in the New York City borough — Canarsie, Flatbush, etc. — sold for $27.8 million in 2017, then a city record, to Santa Barbara, California-based Granite Capital Group, which rebranded it as Enclave Rigden Farms.

Granite has properties under the name “Enclave” in Erie and Henderson with about 170 homes each, and a 48-unit apartment complex, Kipling Commons, in Arvada, its website said.

Kevin and Scott Hearne in December 2017, three weeks after buying Loveland’s Gallery Flats, bought Vistas at Jackson Creek in Colorado Springs for $57.8 million, the last property they own, Kevin said.

He declined to name anyone involved in the Aug. 5 sale of the Flats, referring questions to broker Nick Steele of Berkadia in Denver. Steele has represented the brothers on several deals via Berkadia and in a previous slot at Marcus & Millichap. Jacob Steele has been involved at times as well, reports said.

“We had numerous bids; they were right up there” on price, was Kevin Hearne’s comment about the Aug. 5 sale of Gallery Flats. “Consulting with Nick, we went with them.”

Steele didn’t return a request for comment by press time.

It was “one of the easiest transactions we’ve ever done,” Hearne said. “They were friendly and amenable and very nice to work with. They were as nice as we are.”

Buyers

The buyer is GRRO II LLC in Tempe, Arizona.

The LLC shares the address with AZ School Meals, a catering company for schools, pre-schools, and head start programs, and Borg Holdings Inc., and its representative, Randall Gusikoski. His LinkedIn page said Borg ran about two dozen childcare facilities under the names Sunrise Preschools and Tots Unlimited, which it sold in 2016, continuing to own real estate and run the catering firm.

AZ School Meals Tucson LLC is listed in state filings at the same address. A message left for Gusikoski with the person at the catering company who answered the phone wasn’t returned by press time.

Arizona filings for Borg and the preschools show homes for Gusikoski in Corona del Mar and Irvine, in Orange County, California. The catering LLC’s filing shows a principal’s address in Lander, Wyoming.

The Larimer County Assessor shows GRRO II LLC at the Corona del Mar address.

A local source who asked not to be named said the Gallery Flats buyer group included Wyoming money.

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