Page 2
— Multifamily Properties Quarterly — October 2015
CONTENTS
T
his September I attended the
2015 Apartment Bus Tour pre-
sented by Apartment Appraisers
& Consultants and CREJ. It was a
great opportunity to learn what
owners and developers are pursuing
in the Denver metro. We toured eight
properties, all boasting amenities
on top of amenities, stunning views,
quick lease-up peri-
ods and skyrocket-
ing rental rates.
The demand
that’s driving these
apartments’ suc-
cess also is driving
the construction
industry’s fever-
ish pace. “Builder
confidence and the
construction pipeline expanded, and
developers are anticipated to deliver
a record 12,000 or more units this
year, or over 32 percent growth in
apartment deliveries since 2014,” says
Greg Price in his market overview on
Page 4.
For Colorado apartment inventory,
the 2010s have already delivered more
product to the market than every-
thing that was delivered in the 2000s
and 1990s, according to Apartment
Insights. The 2010s are on pace to out-
build the 1980s as well.
One unavoidable issue is the
increasing cost of living within the
city.With homeownership decreasing,
an increasing in-migration of mil-
lennials and a cultural shift toward
urban environments, multifamily rent
gains are outpacing income gains at
an alarming pace. According to a JLL
contributed article o
rents
have increased nearly 65 percent in
five years, while median household
incomes only have risen 14 percent.
One major contributor to the afford-
ability crunch is a lack of new condo-
miniums coming on line due to con-
cerns over the construction defects
law. As we went to press, there were
reports that Denver Mayor Michael
Hancock was going to introduce his
own reform ordinance for the city.
Other Colorado cities have passed
similar reforms.We’ll be following this
issue closely in upcoming Colorado
Real Estate Journal articles.
The market boon is not restricted to
Class A properties. In fact, older prop-
erty types, especially those from the
1970s and 1980s, are seeing average
rental rates almost double from 2004
to present day.
I want to visit older properties to see
how buildings are staying current and
fresh in this amenity-driven market.
There was a lot of discussions about
value-add properties on the tour, and
I’m eager to hear about your projects.
We’ve put together a comprehen-
sive issue that highlights many of the
market drivers as well as explains
what the statistics mean to the mul-
tifamily world. As we look ahead to
2016, please let me know if you’d like
to see something covered or are inter-
ested in participating in an upcoming
issue. I appreciate your feedback.
Thanks for reading.
303-623-1148, Ext. 104
