2017 SUMMER ECONOMIC CONFERENCE
STAYING
OCCUPIED
CHALLENGES OF RENT CONTROL AND AN UPDATE OF COLORADO'S
TRANSPORATION PROJECTS HIGHLIGHT SUMMER ECON 2017
By Ryan Gager, Hearn & Fleener, LLC
Photos courtesy of Victor Sanchez, imADgine Studios
T
he sight of cranes filling the Denver skyline is the telltale sign
that the 2017 Summer Economic Conference would be a posi-
tive one for the apartment industry. The conference once again
drew hundreds to the Marriott Denver Tech Center, all interested in how
apartments affect not only Metro Denver, but the state of Colorado. It’s
business as usual, as the focus remains staying occupied.
Economic Update
Simply put, the population of Metro Denver continues to grow and
expand every day putting pressure on the housing market. Patty Silver-
stein, President and Chief Economist, Development Research Partners,
explained that this area
increases by around
53,000 people each year.
“When you add rough-
ly 1,000 people each
week to the Denver
metro area there is a
tremendous demand for
housing,” said Silver-
stein. And the high de-
mand for housing isn’t
translating into home
purchases. According to
the National Associa-
tion of Realtors, Metro
Denver ranks 12th and
Boulder ranks 6th for
highest median home
Patty Silverstein
www.aamdhq.org
price. At 6th, Boulder is priced higher than any locations on the East
Coast. Both locations are significantly higher than the U.S. median and
that differential gap is becoming greater. The other issue is lack of in-
ventory. “Keep in mind there are 3.13 million people in Metro Denver,
which translates into roughly 1.2 million households, and we have in
the neighborhood of 4,000 to 5,000 homes available for purchase,” said
Silverstein. “It leads to a very tight, very competitive marketplace.” If
people are unable to buy a home either because they can’t afford one
or can’t find one, they turn to apartments.
Quarter 2 Vacancy and Rent Report
“We delivered more units in 2016 than in the entire history of
Denver,” said Teo Nicolais, CEO, Nicolais, LLC, “And we still are
seeing vacancy falling.” The simple economics show that when vacancy
falls below 6 percent, there
is upward pressure on
rents. Indeed, average rents
in Metro Denver are up
$38 from last quarter to
$1,420, while the vacancy
rate has fallen to 5 percent.
Downtown Denver, City
Park and Denver North-
west are three of the top
five areas for highest rent,
to go along with Boulder
Chris Geer & Teo Nicolais
and the University of
Colorado area in Boulder,
which comes in at #1. Despite the higher rents, demand still outpaces
supply. “Last quarter we delivered just over 2,100 new apartments, but
we absorbed 4,348 units,” said Chris Geer, CEO, H2 Capital, “Mean-
ing we still need 2,200 units to be delivered to keep pace, so it’s a
positive outlook for developers.”
AUGUST 2017 • TRENDS | 15