Page 6
— Multifamily Properties Quarterly — May 2016
C
ivil site services are often written off as a simple,
commodity based component of a construction
project. In contrast, these services literally serve
as the foundation to your project and deserve
extensive attention. Fiore combines 5 decades of
experience with well-coordinated, high quality,
efficient, timely, and environmentally conscious
civil services to ensure that your project is built on
a rock solid base.
O
ur
INNOVATIVE SOLUTIONS, STRATEGIC PROBLEM
SOLVING, and WIDE SCOPE OF SER
VICES can be de-
livered fully managed, as a combined package or
stand alone to meet the needs of the client and
always come with our partnership commitment to
deliver more than what you paid for.
Don’t build your next project on the cheapest
dirt and infrastructure you can buy - your entire
project literally depends on it!
Single services to full site
work packages
Site Management - Demolition
Earthwork - Site Utilities
Environmental - Land Development
Commercial - Landfill - Recycling
Complete Civil
Contracting Services
730 W. 62nd Avenue Denver CO 80216
Phone: 303.429.8893 / Fax: 303.429.3035
Together We Can Move Mountains
“SAFELY BUILDING A BETTER WORLD”
N
orthern Colorado is a great
place to live. Just ask nearly
anyone who lives here and
he’ll be happy to tell you. In
many cases, you may not
even have to ask the question to
have someone tell you how much
he loves the area. With the qual-
ity of life that Northern Colorado
residents enjoy and the enthusiasm
with which they explain to others
why they love the area, it’s no won-
der that the area continues to expe-
rience strong population growth
of approximately 2.5 percent year-
over-year from 2014 to 2015.
Quality of life means different
things to different people, but sev-
eral of the top contributors to the
definition include: 300-plus days of
sunshine per year, an abundance
of outdoor recreation opportuni-
ties, world-class craft breweries, the
vibrancy contributed to the region
by two major universities, conve-
nience and proximity to the Denver
metro area with a smaller-town
feel, relatively low crime and the
bike culture.
People don’t just come for the
beer and bikes, however. Northern
Colorado benefits from a robust
and diversified economy, which
includes industries ranging from
bioscience and energy to agriculture
and advanced manufacturing. Colo-
rado State University, the University
of Northern Colorado, the diverse
regional economy and opportuni-
ties for employment all contribute
to a region with a highly educated
workforce and strong employment
growth. This is evident in the unem-
ployment rates in
Larimer County,
2.9 percent as of
the end of 2015,
according to a Uni-
versity of Colorado
study, and Weld
County, 3.4 percent
– both are below
the state average of
3.8 percent.
So what do popu-
lation and employ-
ment growth have
to do with the
apartment market?
Demand. Our firm
has been involved, either as listing
brokers or selling brokers, in land
transactions for the development
of over 1,100 units in the past three
years, with contracts in place for
nearly 800 additional units. I am
often asked the question, “Is North-
ern Colorado overbuilt, or will we be
overbuilt soon?” The answer is rela-
tively simple: No.
The apartment market in North-
ern Colorado remains quite strong,
although the Class A or institution-
al-quality communities experienced
some minor softness in 2015, large-
ly due to 500 units being in lease-
up in the Loveland area. Those 500
units are roughly split between
Gateway, near the southeast corner
of Interstate 25 and U.S. 34, and
Bristol Pointe, in southwest Love-
land. Both of these communities
experienced relatively strong lease-
ups. Gateway is approximately 50
percent leased and Bristol Pointe is
about 80 percent leased.
Another likely contributing fac-
tor to the temporary softness was
the extreme increase in rental rates
at several communities, which
resulted in a drop in occupancy
at those communities as renters
went elsewhere. Those communi-
ties then lowered rents to be more
competitive in the market and they
experienced significantly increased
occupancy rates.
With that said, I believe demand
for apartments in Northern Colo-
rado will remain strong given the
population and employment growth
mentioned, as well as rapidly rising
home values, which keeps many
would-be homebuyers in the rental
market. Fort Collins’ median home
price is projected to reach $350,000,
while Loveland’s median home
price is projected to reach $335,000
and Greeley’s median home price is
projected to reach $285,000 in 2016,
according to the Everitt Real Estate
Center at CSU.
Additional factors driving apart-
ment demand include living prefer-
ences of the millennial and baby
boomer generations, separate from
the influx of population from these
generations in Northern Colorado,
and the current construction defect
legislation in the state, which
makes condo development nearly
nonexistent.
Many people within the millennial
and baby boomer generations are
drawn to renting in urban or sub-
urban apartments, which allow for
close proximity to dining, entertain-
ment, culture and night life, while
also being able to enjoy the com-
munity and shared spaces within
the apartment buildings.
Even if millennials can afford
to move to a house in a suburban
neighborhood, many will choose to
live in apartments instead, accord-
ing to Forbes Magazine. Fifty per-
cent of millennials are renters.
Almost half of all adults, and 73
percent of millennials, report they
are very likely or somewhat likely to
move in the next five years, accord-
ing to the Urban Land Institute.
Apartment living allows renters to
move with ease instead of being
tied to one place. The number of
millennials choosing to rent rather
than own results in a decline in
homeownership, leaving a record-
low percentage of American home-
owners under the age of 35 since
1982, according to U.S. News.
On the supply side of the equa-
tion, there are several major fac-
tors that limit developers’ ability to
deliver new apartment communi-
ties in some of the most desirable
areas of Northern Colorado. Several
of these factors include geographi-
cal and political barriers to entry,
construction costs, which have
risen rapidly over the last few years,
availability and cost of raw water
for development, land costs and
lengthy entitlement timelines in
some municipalities.
With these demand drivers and
supply constraints, I believe there
will be significant opportunities
for additional apartment develop-
ment over the next few years. Long
story short, there is more room for
growth in Northern Colorado.
s
Jake Hallauer,
CCIM
Vice president,
Chrisland Real
Estate Cos.,
Fort Collins
Market Update
