DENVER RISING
and other rural areas where land is less expensive . AA & C is currently tracking approximately 40 true build-to-rent communities , plus an additional 20 + communities that are adding a townhome BTR component . We have discovered that these properties are harder than others to identify in the pipeline because they often are indistinguishable from for-sale homes through much of the entitlement and development process . It would not surprise us to find additional communities currently under construction .
Conversion ( Adaptive Reuse )
We have also seen an increase in properties being converted from a prior
" Built-to-Rent appeals to younger renters that can ’ t afford to purchase a home but want to start a family ."
use to apartment rentals , also known as adaptive reuse . Recently , we have seen an increase in the conversion of office buildings , hotels , and motels , although there are other property types being converted throughout the Denver Metro Area , as well .
Adaptive reuse has become more common as construction costs have continued to increase , making traditional development more expensive . In some cases , conversion may cost less than building from the ground up . However , if a developer is not careful , the costs of conversion can also explode , making it much more expensive than traditional ground up construction . Conversion can also be easier to get approved , especially in antigrowth areas because adaptive reuse helps stop urban spawl . Further , because developers are already using an existing structure , conversion can help provide a quicker development timeline , but again there are also risks of unforeseen issues slowing the development of a converted property .
Historic preservation is another reason why developers may choose to convert rather than build from the ground up . In general , most current adaptive
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22 | TRENDS OCTOBER 2022 www . aamdhq . org