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DENVER-Al Brooks, executive vice president and national manager for multifamily lending for Washington Mutual, asked himself: “What market is projected to weather the current recession better than any other in the Rocky Mountain region?” The answer is Denver, Brooks told about 150 multifamily industry officials attending the recent 2002 Economic Conference presented by the Apartment Association of Metro Denver.

The event was held at the Doubletree Stapleton hotel across the street from the former Stapleton International Airport.

Getting the blessing of WaMu, as it is known, carries a lot of weight. WaMu is the nation’s seventh-largest banking institution with more than $270 billion in assets. It is the No. 1 residential lender and servicer nationally and was the No. 1 originator of multifamily loans in the US in 2000 and 2001, when it saw its volume jump by more than 50%.

So far this year, WaMu is the No. 1 multifamily originator, with a portfolio approaching $19 billion in assets under management, Brooks says.

Brooks says he likes Denver’s apartment outlook, despite the current softness, for a number of reasons.

It has become much more supply constrained, especially in the core area. Also, the building and approval process has become much more difficult. While many lenders might find those reasons not to like Denver, Brooks notes such barriers of entry can be an advantage to an institution with the financial strength of WaMu.

“A recent report recently said Denver was No. 1 for being in the ‘red’ zone,” Brooks told the audience. “We think they’re wrong.”

The same thing was said about Portland, OR a few years ago, where WaMu has $500 million invested, he says. That market has been a gold mine for WaMu.

Brooks says Denver still has tremendous appeal for 20- to 35-year-olds.

“Denver scores very well on the ‘hip’ and ‘cool’ meter,” he says. It also is a leader in lifestyle issues vs. growth, an important distinction, he adds.

“That’s why we’re not playing in Texas,” he says. “The attitude there is growth for growth’s sake. To me, that’s going to make it like LA, and I’m from southern California. It’s classic boom and bust. When you add another 10,000 units when the demand is not there, it gets ugly. You see prices fall from $80,000 to $12,000 per unit.”

The Denver area, he says, will have much more controlled growth, which should equal market stability.

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