CREJ

Page 16 — Multifamily Properties Quarterly — May 2021 www.crej.com Investment Market I t comes as no surprise that there has been a substantial influx of capital being invested into apartments along the Front Range coming from out of state. Of the top 10 most active buyers last year in Denver by total sales volume, eight of 10 are head- quartered outside of Colorado with one group located in Canada. Nearly the same is true for groups by total units acquired, per CoStar Group. There is big money deploying capital into Denver and it is com- ing from major institutions as well as mom-and-pop investors. Once the institutional capital earmarked Denver as a solid opportunity in which to invest, it opened the door for everyone else to do the same. Historically, insti- tutional capital flocked to coastal markets and the inland major metropolises like Chicago, Dallas, Atlanta and Hous- ton. However, in the last decade, those institutions have shifted away from some of those markets and turned toward cities like Denver. What was once a flyover market is now home to one of the most com- petitive apartment markets in the country when it comes to acquisi- tions and disposi- tions. Institutional capital finds itself competing with mom-and-pop capital regularly to win deals. Fac- tors such as con- sistent rent growth and minimal vacancy over the past seven years have given out-of-state investors comfort in the stability of the market. Further, 1031 exchange buyers and whichever investment group has the cheapest cost of capi- tal are fueling an unprecedented apartment market along the Front Range. But why is the Denver metro area as hot as it is? Why leave cit- ies that for generations have been lucrative places to invest in? The answer to these questions is radically complex and hinges on countless catalysts both political and socioeconomic. To try to nail all of these reasons on the head would be virtually impossible to do. However, there seem to be recurring Capital continues to pour in from other regions Nik MacCarter Senior adviser, Capstone Brandon Kaufman Senior adviser, Capstone Please see MacCarter, Page 38 The most active buyers by number of units in the past year The most active buyers by sales volume in the past year