CREJ

16 / 32

Page 16 — Multifamily Properties Quarterly — February 2017
Broker Insights
Since 1996, LAI Design Group has been involved in
a variety of high density multifamily and attached
housing projects ranging from 10 to 300 units
per acre. These solutions range from high end
luxury urban living environments to affordable
housing strategies.
D E NV E R • HOU S TON
REAL ESTATE DEVELOPMENT
• Recreation & Clubhouses
• Multifamily
• Mixed-Use
• Hospitality & Resort
• Industrial & Logistics Parks
• Visual Media & Marketing
• Residential Product Development
• Community Design
MARKET SECTORS
As the multifamily industry
ponders how to meet the
housing needs of millennials
and baby boomers, Colorado
is facing two very different
demographic paths looking forward.
How we recognize and react to the
needs of these population groups
will have a major effect on the
health of our state in future years to
come.
Things are good right now in Colo-
rado. We were the second-fastest
growing state in 2015, according to
the census bureau. U.S. News and
World Report ranked Denver first
and Colorado Springs fifth in its 2016
Annual Best Places to Live rank-
ings.
Communities up and down
the Front Range consistently are
ranked in the top tier of best-in-
class lists. The appeal of Colorado’s
outdoor lifestyle, highly educated
and healthy population, agreeable
weather pattern and diversified
economy are attracting companies
and members of the millennial gen-
eration.
At 34, I am one of the older mem-
bers of the millennial generation. I
wanted to share a millennial per-
spective and some conversations I
recently had with my more experi-
enced and wise baby-boomer partner,
TomWanberg, regarding demograph-
ics and Denver’s destiny.
Demographic trends and what
the future holds have been popu-
lar topics of conversation lately. I
approached Wanberg with my com-
ment that people have never seen
this many cranes in Denver. The mar-
ketplace, the press and all sorts of
experts have been anxiously trying
to predict if millen-
nials will keep com-
ing. Will millennials
move out of their
parent’s homes and
will they have wage
growth to support
the luxury apart-
ment construction
going on?
As to baby boom-
ers, what do they
want? Will they
downsize and move
into smaller homes,
condos or apart-
ments? Will they migrate to Denver
to be closer to their grandkids? Will
they want downtown convenience or
golf-course living in the suburbs?
“Sometimes it’s best to move out
of the trees and get in the airplane
to reassess the landscape,” Wanberg
said. “We’ll adjust faster than you
think to the cranes; remember the
reason there are more cranes now is
that we are building up in order to
accommodate an urban lifestyle. We
used to build out. In fact, there was
a lot more construction back in the
’70s than there is now.”
On that note, Wanberg told me to
go talk to Cary Bruteig, principal at
Apartment Appraisers & Consul-
tants, who has been studying and
appraising Colorado apartments for
decades. Bruteig told me the larg-
est number of multifamily permits
for metro Denver was pulled in 1973
and was around 25,000.
“The interesting thing about demo-
graphics in Denver is that the popu-
lation percentages between millen-
nials and baby boomers is relatively
similar,” he said.
Bruteig knows what he is talking
about. Author and consultant, John
Burns, in his latest book “Big Shifts
Ahead - Demographic Clarity for
Businesses” discusses the trends
behind this phenomenon. In the
graph, Burns showed how the popu-
lation for metro Denver was relative-
ly constant for those born between
1960 and 2010.
I went back to Wanberg and
explained what I’d learned. With
Denver absorbing 6,000 to 8,000
units a year for the past couple
years and Bruteig’s latest fourth-
quarter construction report showing
25,382 units under construction and
another 26,884 units planned, I said
investors still have concerns about a
big bust.
“Things are a little different now,”
said Wanberg. “We have moved from
a tertiary market to a primary mar-
ket. We’re not the 12-hour city that
we use to be. Go talk to Tom Clark.”
Clark, executive vice president at
John
Blackshire
Associate broker,
Transwestern,
Denver
Howdoes present day activity compare to the past?
DENVER MSA: POPULATION BY DECADE BORN
84K
191K
329K
378K
402K
452K
356K 374K
1930s
SAVERS
1940s
ACHIEVERS
1950s
INNOVATORS
1960s
EQUALERS
1970s
BALANCERS
1980s
SHARERS
1990s
CONNECTORS
2000s
GLOBALS
US Born
Foreign Born
Source: John Burns Real Estate Consulting, LLC calculation of US Census Bureau data
The population for metro Denver was relatively constant for those born between 1960
and 2010, according to John Burns’ book, “Big Shifts Ahead – Demographic Clarity for
Businesses.”