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