Multifamily Market Signals Positive 2000 Close

DENVER-In the first nine months of the year, investors snapped up 66 apartment projects with 30 units or more, shows a report by the local office of Hendricks & Partners. Fifty-one of the sales had been complexes built in 1974 or before. They sold for an average unit price of $48,764 or $66.39 per sf.

Only 15 projects, built from 1975 to 2000, had sold through the third quarter.

In a breakdown, four of the sold projects, built since 1995, had gone for an average price of $88,962 per unit or $90.71 per sf. One project, built between 1990 and 1994, had fetched $96,324 per unit or $103.83 per sf. Two projects, built between 1985 and 1989, had brought in $62,561 per unit or $69.19 per sf while three projects, built in the 1975-79 period, had sold for $43,111 per unit or $55.01 per sf.

“Denver’s continued economic expansion provided sold support for the local apartment market in the third quarter,” the report says. The overall vacancy rate had dropped slightly to 3.4%, down from 3.6% a year ago. “Demand excelled as 3,879 units were absorbed, up from 2,899 units absorbed one year ago,” according to the report.

Developers had pulled permits for 3,364 units in the third quarter as a result of concerns that a no-growth constitutional amendment would be passed by voters in November. In third quarter 1999, there had been applications for 2,235 units.

Boulder County, home of the University of Colorado’s main campus, had the lowest vacancies and highest rents. The vacancy rate stood at a mere 1.5% in Boulder County, compared to 3.8% a year ago, and the average monthly rent was $926, up from $873 in 1999, the report shows.