During the event, we polled attendees to determine what the vacancy rate will be like when we gather at the next two Economic Conferences
96 percent. So where are we in the cycle? Since recovering( phase I) to the long-term occupancy average, Denver has experienced several years of expansion( phase II) which has led to hypersupply( phase III). Hypersupply is indicated by new construction and increasing vacancy. When occupancy dips back below the long-term average we enter recession( phase IV). However, that isn’ t expected in 2017.
Jeff Hawks, Vice Chairman, ARA Newmark, reminded everyone that it is still a good time to be an apartment broker in Denver. Sales volume jumped up from previous years to over $ 6.5 billion, thanks to some large deals including The Breakers, which sold for $ 350 million. As Denver continues to grow it attracts new buyers, so it isn’ t surprising that many of the top buyers are new buyers to this market. Hawks assured that Denver’ s multifamily market continues to be strong because of several factors including continued inmigration and population growth and lack of affordable housing.
Mark Monroe, President, Energetic Consulting, Inc., spoke about the benefits that solar power can provide to the multifamily industry.“ Adding solar to hundreds of apartments would provide benefits for both owners and tenants,” said Monroe. The list of possible benefits includes generating clean energy, reducing the carbon footprint, protecting against rising energy costs, improving energy security, impacting climate change, increasing property value and increasing rents, while at the same time saving tenants money. Monroe pointed out that returns could be seen quickly, estimating that owners could receive a 148 percent return on their investment in the first year.
Rounding out the panel was Ken Schroeppel, Founder, DenverInfill, who pointed out that for Denver to stay occupied, it’ s not about affordable housing, but affordable living. The current era of“ Walkable Urbanism” is defined by high density with vertical mixed-use buildings lining wellconnected streets. Denver also has incorporated a pedestrian and bike infrastructure aiding the urban lifestyle. But not everyone lives in the immediate urban environment.“ Your location dictates your mobility and
Teo Nicolais
Dave Brewer
Jenny Jacobs
Chris Geer
housing choices,” said Schroeppel. According to the U. S. Bureau of Labor Statistics, housing and transportation account for 50 percent of average household expenditures. The H + T Index is a tool designed to show the housing and transportation costs in percentage of income for specified areas of metro Denver.
Housing providers continue to play a key role in Colorado’ s economy. Development, transportation, technology, outside investors and jobs attract new people to metro Denver. How these pieces fit and work together will determine what kind of year 2017 will be.
TRACKING OCCUPANCY- IN THE NEXT 6-12 MONTHS
During the event, we polled attendees to determine what the vacancy rate will be like when we gather at the next two Economic Conferences
< 1.0 %
1.0 %- 2.9 %
3.0 %- 3.9 %
4.0 %- 4.9 %
5.0 %- 5.9 %
6.0- 6.9 %
> 7.0 %
... IN SIX MONTHS? < 1.0 %... IN 12 MONTHS?
1.0 %- 2.9 %
3.0 %- 3.9 %
4.0 %- 4.9 %
5.0 %- 5.9 %
6.0- 6.9 %
> 7.0 %
18 | TRENDS • FEBRUARY 2017 www. aamdhq. org