Colorado apartment vacancies drop in Q4, rent up

Colorado apartment vacancies drop in Q4, rent up

In a recent article by Dennis Huspeni of the Denver Business Journal, Colorado apartment vacancies are falling in “lock step” with the City of Denver’s most recent vacancy report (http://www.bizjournals.com/denver/news/2012/02/02/denver-area-apartment-vacancies-hit.html).  Dennis Huspeni was also the author of a similar article earlier in February called, “Denver-area apartment vacancies hit 12-year low for Q4” that was specific to the City of Denver’s apartment market.  I find it most interesting when the State of Colorado’s apartment vacancy is mimicking that of Denver’s apartment vacancy.  In my experience, Denver is typically the market leader when the apartment market is strong, and the Denver apartment market has been reporting several quarters of positive data.  It’s particularly encouraging when the apartment market for the entire State of Colorado is on the same path as sometimes the secondary and tertiary markets of Colorado tend to lag behind Denver.  One commenter (Ken C.) to Dennis’ Colorado apartment vacancy article on Wednesday said, “All you current and future landlords out there pay attention! Rates low+Vacancies low=Time to acquire more properties???”  I agree completely with his commentary.  The Denver Apartment Buildings For Sale market is wonderful.  Apartment building Sellers have the opportunity to capitalize on low vacancy which has increased rent, and in turn will increase cap rates and cash-on-cash return with higher income.  Apartment building Buyers can benefit from a lending and interest rate market that is truly outstanding.  Many apartment loans can be quoted in the low to mid 4% interest rate currently.  Colorado’s apartment rental market is exhibiting strong fundamentals which should result in wonderful opportunities for the near future.  I would encourage investors to contact me to discuss their apartment building performance relative to the rest of the market. 

 

FYI: Dennis Huspeni is a wonderful journalist.  He covers real estate and retail for the Denver Business Journal and writes for the “Real Deals” blog. Email: dhuspeni@bizjournals.com. Phone: 303-803-9232.

~ Kyle Malnati (Madison Commercial Properties – Madison & Co. Properties, Denver, CO)