Category: Investments
Air Date: 10.30.2020

Denver Multifamily Market With Top Broker Adam Riddle

Today, we’ll speak with career Marine, Brian Biscoe about the buzzing Denver multifamily market!

The pandemic has impacted many multi-family markets across the US but in Denver, the Mile High City, the investing landscape is as solid as ever. Today we get an insider’s perspective on the Denver multifamily market from Adam Riddle, Principal of Nexus Commercial Realty. We open our conversation by chatting about the trend of people leaving coastal cities and embracing a work-from-home lifestyle. With a diversified economy and easy access to nature, as Adam explains, more people are moving to Colorado than ever. We discuss what the cap rates look like across Colorado before diving into local investment trends and later, the strategies that are common in the Denver market. After sharing his journey into real estate, Adam provides his top advice to listeners wanting to invest in Denver — with details on areas that they should consider investing in. We touch on why a low cap rate isn’t a sign of a bad deal and then dive into Adam’s keys to success. His answers highlight the importance of understanding occupancy rates and why time management is a critical skill for investors to master. Tune in for an overview of Denver’s market from one of the city’s top brokers.   

Key Points From This Episode:

  • Adam shares details about his company’s investment niche.
  • Hear why Colorado’s single-family real estate market is “on fire.”
  • Exploring the many reasons that people are moving to Colorado.
  • What the general cap rates look like throughout Colorado.
  • Colorado investment trends and why Adam’s company is the busiest that it’s ever been.
  • How COVID hasn’t slowed down the Denver real estate market.
  • Adam talks about his journey into real estate.
  • Top advice to investors who want to enter the Denver multifamily market.
  • Common strategies that Denver investors are employing.
  • Why a low cap rate doesn’t indicate how good a deal is.
  • Adam shares some insider information on areas in Colorado you should invest in.
  • What every investor should look for in a deal and what Adam is most proud of.
  • Why time management is has been the key to Adam’s success.

Links Mentioned in Today’s Episode:

Kent Ritter

Adam Riddle on LinkedIn

Adam Riddle Email

Nexus Commercial Realty

The Buddha and The Badass

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Interested in Investing Alongside me in our next multifamily deal?

Contact me at

My operating partner, Birge and Held Asset Management has a twelve-year track record creating sustainable wealth for over 2000 investors through high-quality multifamily investments.

Thanks for listening!

—Full Transcript Below—

AR: One of the bigger trends that we’re talking about right now is we’re looking at our stats and closings who’s buying. It’s a lot of new capital to the state. We closed a project with a Canadian group last week, closing a project with a South American group next week, and just closed yesterday on a $8.5 million deal with a new group on a Colorado Springs project.”


[00:00:26] KR: Welcome to Ritter on Real Estate, the show about how to passively invest like a pro. On each episode, I interview real estate experts who give their top investing advice, strategies, and tools that break down the insights and the practical steps to avoid the pitfalls and make better investments. I want to help you passively invest like a pro. This is Ritter on Real Estate, and I’m your host, Kent Ritter.


[00:00:49] KR: Hello fellow investors. Welcome to Ritter on Real Estate, where we teach you how to passively invest like a pro. Today, I’ve got a guest. His name is Adam Riddle, and he’s a broker and investor based out of Denver, Colorado. He’s closed over 500 transactions, worth in excess of $550 million in the multifamily sector, and he’s grown and led his team of brokers toward a 400% increase in revenue over a four-year period.

So, Adam, thank you for joining today. Very happy to have you here and hear a little bit about yourself. So I want you to start by telling the group a little about yourself and your background.

[00:01:25] AR: Perfect. Thanks for having me. I always appreciate coming on and trying to help educate people. My name is Adam Riddle. I’m one of the Principals and Co-founder of Nexus Commercial Realty based out of Denver, Colorado. We are a — some people would call it boutique or a boutique brokerage shop that focuses solely on the multi-family sector and development of multi-family. We just started our company about three and a half years ago. We do what we would call mid-market transactions, so not chasing the kind of huge class A type product type. We do a lot of older products, 10, 20, 30, 40, 50 units, value-add. And I’ve seen a dynamic. I’ve been doing it in Colorado since ’08, so I’ve seen a very dynamic market over the last 10 years here in Colorado, and it’s been real fun. This year has been a bit of a challenge, but it’s okay. It’s not all bad here, for sure.

[00:02:18] KR: That’s good. Yeah, I mean, from what I’ve seen in Denver, I mean, and all of Colorado, you guys are still growing like crazy, so I think there’s a lot of good things happening out there.

[00:02:27] AR: Yeah. I feel like we almost are a little bit of a benefactor of some of the things that are happening in some of the coastal cities, with people working from home and having the ability to do that permanently. People are moving to Denver and Salt Lake and some of these other cities that maybe were not options before. And getting to choose more of a different lifestyle. So our real estate is doing really well. Our single-family, just personal residence market is on fire, and the mountains are going pretty nuts right now too. So a lot of factors in the Colorado market are doing really well at this point.

[00:03:04] KR: Yeah. I think that makes a lot of sense. You guys actually will be a net benefactor of what’s going on. Obviously we talked a little bit about it, the migration that’s coming in. I mean, what are other things that are attracting investors into your market? I mean, why are you seeing so much attention come into Denver?

[00:03:24] AR: Yeah. It’s been interesting. So in ’07, ’08, it was still probably considered kind of a flyover city. So kind of, we were still considered a cow town, if you will. In this last cycle which we came out of kind of the downturn of ’08, ’09, pretty early in comparison with some other maybe Midwest cities or Phoenix or Las Vegas that got hit really hard. We came out pretty early and we’ve had a very long trajectory of growth. I think part of that is due to the continued immigration of people into the state. And I think our government and economic growth. People do a really good job at going out and attracting top businesses that are looking to relocate out of other cities and incentivizing them to move here.

It’s a generational thing but I think we’re benefits of people that are coming out of school and saying — I think the old adage was, “You found a job and then you moved there.” Now, it’s, “I want to live there. I will just move there and then I’ll find a job.” I think we’re benefactors of that, for sure. I think we have a very diversified economy, which they’ve, you know, worked for 20, 30 years over. So if one sector’s oil and gas may be hurting, that’s not going to take down our city, if you will. But I still think the biggest thing that everybody moves here for, the reason I moved here — is the thing that we have out less, which is mountains to plain.

[00:04:49] KR: Yeah, absolutely. That’s a huge amenity that you can’t build, right? So what should investors expect in the Denver multifamily market? If you’re looking in the market, I mean, what are the prices per door? What are cap rates that we’re seeing? What kind of returns should folks be expecting?

[00:05:09] AR: That’s a good question. So our shop, we have an office here in Denver and a shop in Colorado Springs but we work essentially in Fort Collins and Greeley, kind of our northern border up against Wyoming and down to call it Pueblo, which is a little south of Colorado Springs. Then we sprinkle in a little bit of the mountain resort communities, but the majority of the population and the majority of the transactions in our multifamily side are going to kind of have an up and down the I-25 corridor from Fort Collins through the metro area down to Colorado Springs and Pueblo.

Obviously, that’s a lot of diverse neighborhoods and demographics and incomes. But starting from central Denver, main and main type addresses going for sub-5 caps to Greeley, Pueblo, some parts of Colorado Springs or it can be six and a half, seven caps. So it’s a very wide variety, even in — just in the Denver metro area and not even accounting for some of the other cities around. It can vary drastically. I mean, there’s different pockets, even of — one of our suburbs, Lakewood. I happen to live in Lakewood, but geographically it’s a very large city and has a lot of different kind of pockets of apartments in it, and some of them are better than others.

So it can vary quite widely. I mean, we are considered a tier-one city for Fannie and Freddie. So if that’s the type of debt people are going after, you can still get great debt here. No matter kind of what area of the city it’s in, it’s still considered tier one. That’s always a plus.

[00:06:43] KR: Gotcha. So what type of transactions are you seeing happening? What type of properties are our folks buying? I mean, are you seeing trends come through of what investors are liking right now or where people are focusing?

[00:06:58] AR: We’ve had a very busy back half of the year. Spring and early summer was playing to keep deals together and try to get extensions when buyers and lenders were bailing at the last minute. And we kind of knew the market would — we had a feeling, I guess the market would come back. And it’s come back, and it’s come back very dramatically. I think this month will be our busiest month of our company in all time on closings. At one point, a couple weeks ago, I think we had 44 projects under contract throughout our company. So it’s coming back.

I would say that one of the bigger trends that we’re talking about right now is we’re looking at our stats and closings and who’s buying. It’s a lot of new capital to the state. We closed a project with a Canadian group last week, closing a project for the South American group next week, and just closed yesterday on a $8.5 million deal with a new group on a Colorado Springs project. So it’s really a trend to new people with a new focus on Denver, and I don’t know if they’re following that immigration. I don’t really totally understand why that is or just Denver’s been on the map and people are seeing this maybe as an opportunity to beat out some of the usual suspects that maybe have been playing. I think and/or the usual suspects are considering they should get a discount because maybe collections are a little off. So it’s giving opportunities to some of the people that don’t currently have assets in town to come in and compete a little bit more.

[00:08:30] KR: That’s interesting. I mean, are you seeing that occur, I mean, since COVID? Have you seen discounted pricing or is it really more of a buyer expectation for the locals that you’re not seeing that bid ask spread come together to complete a deal? I mean, what’s been happening since COVID as far as pricing?

[00:08:47] AR: Pricing was aggressive going into COVID, just like many places in the country. I mean, we were aggressively priced on many things.

So, for the ones that were too aggressive, I mean, there definitely had to be some price adjustments — that they actually wanted to transact. But we haven’t seen a ton of movement in pricing, to be perfectly honest. I think people still consider our market and our asset type being multifamily, a very safe place to put money. Going in ’08, ’09, 2010, it was worth the old adage that “People still needed a place to live.” The person leasing some office space to run a full, a small personal business, maybe they need that office space. They can work from their basement or that retail person maybe didn’t need as big of a foreplay on the retail, but people always need a place to live.

So I think a lot of people are refocusing, if you will, on the multifamily sector. I mean, I think Denver is just one of those places and Colorado is one of those places that has just really kind of established itself as a place where people like to travel to. I mean, I’m sure people — that if you have an investment out of Colorado, you like to come see it, especially during the winter time, and you can go hit the slopes at the same time. So I think we’re getting a lot of that type of money, but we have not seen a major adjustment in prices, although we get calls every day from buyers that would love to see that. We have just not seen, maybe a percent or two on some, certain cases. But there’s a deal yesterday that sold for 110% of its list price. So with competing offers, 12 competing offers. I mean, no contingencies and all that kind of fun stuff.

[00:10:27] KR: So Denver hasn’t slowed down. If anything, it’s just as hot as ever is what it sounds like.

[00:10:32] AR: It’s as hot as ever, I would say. I mean, hopefully the year finishes strong. But talking to some of our counterparts, they feel like 2021 is going to be one of the biggest years ever for apartment transactions in Colorado. We hope that that continues to happen.

[00:10:49] KR: Definitely. So, Adam, what was it that got you into multifamily to start off with? I mean, you could have focused on any asset class in real estate. How did you land in multi-family?

[00:11:00] AR: Kind of an interesting story. I don’t have any background in multi-family. I never studied real estate. To be perfectly honest, home schooled for marketing. I just wanted to get into something in real estate and I felt like the income potential was high and it was more of a — you put the effort in, you’re going to reap the rewards. So I was kind of drawn to real estate in general with that. Then I honestly just locked into answering an ad, actually on Craigslist, when people used to look for jobs on Craigslist. For a team, a successful multi-family team. I was looking for kind of a runner, cold caller, put together package guy. Again, very fortunate to answer that ad and be the one chosen. And got to learn for some very seasoned professionals in the business. So I honestly kind of lucked into it.

But now, as my wife would tell you, it’s my passion. It’s what I love to do. I would work two times the amount of hours if I didn’t have a wife and kids at home. Because I really like what I do, and I think it’s interesting and fun and strategizing with people that are learning or trying to grow their wealth through real estate investing. It’s just a really fulfilling thing for me.

[00:12:10] KR: No, that’s great. So what advice would you give to new investors as they’re coming into the Denver market or Colorado market and looking around? I mean, what are some things that you can tell our investors?

[00:12:24] AR: I mean, obviously if you’re looking on your own or if you’re looking at a deal through a sponsor per se, I mean, obviously I always say do your due diligence on whatever sponsor you’re looking at a deal through. But if you’re looking at deals on your own, as any city that has a decent population, figure out the pocket. Figure out what you’re looking at, what’s going on in that particular pocket. Just because it says Denver, Denver’s a big city, so we have anything from the highest to the high, to kind of workforce housing all in the City of Denver, not much less the suburbs of Denver. So really trying to figure out what that pocket is, what it’s like, how many and what competition is in that immediate area. And how it’s performed over the last two or three years. I think that’s some things that I would really dig into and just the demographic. Those are probably the things I would tackle first.

[00:13:19] KR: Sure, sure. Are there strategies that you’re seeing investors employ? Are there common themes, whether it’s kind of a core play, whether it’s distressed or value-add? I mean, are there things that you’re seeing be successful in your market?

[00:13:38] AR: Yeah. The fun thing about what we do is we get to talk to a bunch of different people that have a lot of different strategies. So we’ll work with a family office that’s very location-driven, not as cash-on-cash or IRR-driven because it’s their money and it’s a generational thing. And it’s more about putting 40, 50% down and passing it onto the next generation type investing. Which, for them, obviously that’s a very different thing that we’re looking for in showing that person — versus a syndicator that’s going to go out and find the deal and then go raise that money through their network.

Things are expensive here over the last 10 years. It just continued to go up and up, and so some people are struggling with kind of where prices are these days. Our opinion is there’s still opportunity out there. It’s maybe not the bread and butter value-add play that it once was where you can buy it for 100 a door and put 30 into it and it’s worth 150 or 160 a door. It may be not be that sort of bread and butter, but there’s value to be had. I think it’s more on the operational side these days than it is — “You need to go put a bunch of money into it.”

There may be some cosmetic stuff but I think a lot of people, a lot of owners these days, they may have owned it for four or five years and are just not paying attention as much as the new owner. I think some people can get some value out of just coming in and being a little more on top of third-party management and having a better strategy going at it that way. So I’m seeing some success there. Interestingly enough, we’re seeing people that are buying core plus that were value-add buyers because they feel like the spread between value-add and core these days is not wide enough in Denver — that they’d rather have a newer building and a great location and pay a little less cap rate. That strategy is what some people are looking for.

We get a lot of different strategies from a lot of different people. I think at the end of the day, it’s the capital that you have and what you’re trying to accomplish with it. Is it one big cash flow? Is it appreciation? Is it long-term hold, investing, and safe? Obviously, every real estate deal has risks that are associated with it, but different capital, I think, has different needs and goals at the end of the day.

[00:15:54] KR: Sure. So you said something to me before we started recording. You said one of the best deals you’ve seen was on like a two-cap. And then there could be a lot of money made even in a low cap-rate environment. Can you expand on that a little bit and tell the listeners? I think that’s a common misconception folks have that you can’t buy in a low-cap-rate mark.

[00:16:14] AR: Sure, yeah. We were discussing some good deals and we get a lot of phone calls from people inquiring about the market, and I love to talk about our market and what’s going on. And what we’re seeing, and just to set expectations because some people still feel like Denver maybe should be trading for a higher cap rate, but it’s not very high in comparison to — it’s higher than San Francisco and Seattle and some of these other major markets, but we’re not trading seven caps here in the metro area very often.

A lot of people get focused on certain things, whether that be cap rate or what is the cash-on-cash return going in. My comment earlier was some of the best deals we’ve ever done were like two caps because they had a story to them. So my advice would just be if it’s a low cap rate, it doesn’t necessarily mean it’s not a good deal. Try to figure out if there’s a story. Maybe there’s not a story if a seller is just expecting a two-cap and that’s unrealistic, great. But I think some people overlook some potential opportunities because that going in cap rate isn’t at their threshold that they’re trying to hit. I’m not saying go out and buy a bunch of two caps, but don’t overlook some of those because that might be some great opportunity for an investor to come in and have a really good value-add story to it.

[00:17:36] KR: Yeah. I think your point is about understanding the market and understanding — not just looking at the face value of numbers but understanding what the story is behind it. Because if it’s, for whatever reason, the property is $200 below market rent, obviously the cap rate is going to show lower than if it was really at market, right? So there might be real opportunity there. You just have to do the extra diligence to kind of vet that out, right?

[00:18:01] AR: Exactly. So you’ve got to learn what the rest of the neighborhood’s charging and maybe you can’t always buy just on pro forma. But you also got to understand if there’s upside and how achievable it is. And if they’re — “What will we run into because we don’t sell 200-unit class A apartment buildings that is institutionally ran and has perfect books and records?” We sell a lot of the mom and pop type projects. The way everybody runs their property is different, and the way they categorize repairs and maintenance may be different. So it’s really trying to dig into all that and understanding what you’re really looking at, I think, is where people might find a little deal that nobody else thinks is a deal that way.

[00:18:45] KR: Yeah, definitely. Are there certain parts of your territory, whether it’s Denver, Colorado Springs, wherever you are? Are there certain places that you’re seeing opportunities these days or certain areas you would suggest people look into?

[00:18:58] AR: I think there’s opportunity in a lot of different places. I mean, Colorado Springs, we’ve been working in that market for seven or eight years at this point. But we’ve had a physical presence with an office and brokers in that market for about three years now. And that’s just been kind of an overlooked market. Some of the Denver investors we worked with five years ago, we’d say, “Hey, look, Colorado Springs.” And they just say, “No.” Like, “It’s not that far away.” I think it’s kind of been overlooked a little bit, and they have not delivered as much new supply. They are definitely building but not at the rate of the metro areas. And they’ve done a good job at diversifying their economy, and it usually trails Denver by a few years. So I feel like there’s still some good growth down there.

I’m always biased to the west side of the metro area because that’s where I’ve always lived. I feel like if people are moving to town, they’re moving to town because of the mountains. So the closer they can be to them with that reason of being close enough to downtown, the better.

And Lakewood is our biggest suburb on the western side of the metro area. They’ve passed a no-growth initiative, which we could talk for a long time about that. But essentially capping the amount of new homes and new multifamily units. So I feel like anything that’s an existing asset out there is going to have a long-term advantage being that you can’t add a bunch of new units to the market because they’re not going to let you.

[00:20:26] KR: Gotcha. So in Lakewood specifically, there’s restricted supply.

[00:20:30] AR: In Lakewood and Golden which is another one of our western suburbs. So a lot of the western half of the metro area has restrictions in place. Again, if you want to live on the west side, you’re moving here from New York or Boston or whatever. And you want to live on the west side of town, there will continue to be limited options moving forward as we can only deliver 1% of the household doors a year.

[00:20:56] KR: Gotcha, very interesting. Well, those are good tips for folks to dig in further if they’re interested in Colorado. I appreciate that. So on every show, we like to round things out with a session called keys to success. We’ve got a few questions I want to run by, Adam, and get your thoughts. The first one is what’s one question that every investor should be asking as they look at a deal?

[00:21:18] AR: Good question. I always like to know the occupancy history. “So, great we’re a fully occupied building today, but what is the history of the occupancy there?” Not that that makes or breaks the deal but just understanding what that looks like. Do they have a lot of turnover? Is that because the street’s busy? Is that — there could be a lot of different factors that go into it that may be harder to understand just by looking at a profit and loss in a rent roll, so understanding the occupancy history.

[00:21:48] KR: So not just looking at current financials and current rent roll but getting historicals as well and comparing what’s been going on.

[00:21:56] AR: Yup.

[00:21:58] KR: What does it tell you if you’re seeing a property where you’re seeing the occupancy go up and down or maybe there was a slump a while back? I mean, what are things that that might tell you to look out for?

[00:22:10] AR: That maybe there’s crime in the neighborhood. Maybe it’s on top of a busy street, and people originally think that that’s not a big deal. But once they move in, they realize like, “Yeah. That’s kind of not great.” That there’s other bad tenants in the property that are forcing maybe some good tenants to leave because they’re out there late at night and making a bunch of noise. Lastly, which happens a lot, sometimes the manager is just not responsive or not doing their job, so it actually could be an opportunity for a potential buyer as well.

[00:22:43] KR: Gotcha, interesting. Then what are you most proud of in your career?

[00:22:48] AR: Most proud is we started — my partner and I started this company after 10 years in the business three and a half years ago. And we’re at 20 people, and we’ll do, probably, 80, 90 transactions this year and growing. So being able to kind of start from — with two people and grow it in this amount of time and have some pretty good success has been very fun and I’m very proud of that.

[00:23:16] KR: Yeah. Congrats, man. That’s great growth. And then what book should everybody be reading?

[00:23:22] AR: I just reached over and got mine out of the briefcase. So this is called The Buddha and The Badass, so essentially talking about taking some of the practices of a Buddha and turning them into making your career successful. Always trying to get better and learn and figure out how to continue to get better at the craft.

[00:23:46] KR: Very good. Then lastly, what is your number one key to success?

[00:23:50] AR: Number one key to success. I think for me it’s time management. I mean, I think there’s only so much time in the day, and so figuring out what’s the priority and what’s not and sometimes saying “No” to some things or passing them on. Certain projects that I’m just not going to be able to put the time and effort into it that I feel like it needs and being able to have a team behind me that I’m confident in and I can pass the baton on and know that it’s going to be taken care of. So time management is always a constant battle and a struggle with any successful real estate broker, I feel like. It’s a daily thing but continuing to try to master that and still have a life. We all have a short amount of time on this Earth. We need to be with our family and friends and all that kind of good stuff too.

[00:24:46] KR: Yeah, very good. Great advice. Great advice for everybody. So, Adam, how can folks get a hold of you if they want to reach out and learn more about what you’re doing or maybe invest in Colorado?

[00:24:58] AR: Yes. So our website is — which is, My email is ariddle, that’s R-I-D-D-L-E, @nexus, N-E-X-U-S, I’m happy to just chat about the market in general. We send out quarterly updates and monthly snapshots and different sub-markets. I can add somebody to an email list or whatever they’d like. We [inaudible 00:25:26] all of our projects out of our email list. So happy to have a chat or add anybody to our list that would like some more information on Colorado.

[00:25:35] KR: Awesome. Well, Adam, thanks again for being a guest on the show. Thanks for teaching us a little bit about your market there out in Denver and Colorado. I think you brought a lot of value to the listeners today. So, again, thank you for being on the show.

[00:25:46] AR: Thank you. Appreciate you having me.

[00:25:48] KR: Absolutely.


[00:25:49] KR: Thanks for listening to another great episode of Ritter on Real Estate. Hit the subscribe button and make sure you don’t miss out on the content that will make you a better investor. Also, visit for articles, videos, and tools curated just for passive investors. Until next time, this is Kent Ritter with Ritter on Real Estate. Now, go out and invest like a pro.