A rule of thumb is that it takes four jobs to fill one apartment unit, says Chuck Sweeney, of the Denver office of Hendricks & Partners. Sweeney, who founded the office, has sold more than $1 billion in apartments during his career.
Sweeney says the metro area needs to create 60,000 new jobs to fill 15,000 apartment units, bringing the market back to equilibrium. That's almost equivalent to the 70,000 jobs lost in Colorado since 2001.
He made his comments at the recent Rocky Mountain Commercial Real Estate Expo and the University of Denver Fall Economic Forecast at the Colorado Convention Center.
However, despite the dire news, apartment communities still sell for fairly high prices, Sweeney notes. One reason is that there are still more sellers than there are buyers, he says, and there's a lot of money on the sidelines looking to be invested.
The bull market in bonds appears to have run its course, money markets are yielding only about 1%, and many investors are still spooked by the stock market, he says. And thanks to low interest rates, many apartments can have positive cash flow even at lower rental rates, he notes.
On average, apartment sale prices are off a bit from their record levels, but they are not far off the mark, he says. And he expects that at least two communities will sell for record prices by year-end.
Apartment communities that will be in especially high demand will be those along transportation corridors, such as those near light rail stops, he concludes.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.