CREJ

Page 36 — Multifamily Properties Quarterly — May 2021 www.crej.com absorbed somewhere between 1,400 and 1,500 units annually in Class A, institutional communities over the past few years, I anticipate demand for new units will outpace deliver- ies of new units over the next 12-18 months significantly, which should result in additional rent growth, further increases in occupancy and strong performance of Class A, insti- tutional communities in the region. Additionally, as Northern Colorado appears to be one of the regions that has benefited from in-migration due to the prevalence of organizations allowing employees to work remote- ly, I expect that the in-migration and resulting robust demand for addi- tional housing will continue for the foreseeable future. The strong market fundamentals coupled with cap rate compression and strong investment demand for Class A, institutional assets in the region has created quite an oppor- tune time for potential sellers of these types of assets. The recent sales of The Wyatt, a 368-unit gar- den-style community in south Fort Collins for approximately $299,000 per unit, and of Rise, a 236-unit, four- story, surface-parked, elevator-served community that sold for nearly $298,000 per unit, are the two high- est per-unit sales in the market’s history. Cap rates have compressed by approximately 100 basis points on the best assets over the last five years, with market cap rates in the low 4% range for the best assets. With strong occupancy, rental rates and low cap rates, now is an excel- lent time to consider selling an asset in the region. Ongoing challenges holding devel- opers back from delivering more apartment units include sourcing quality development sites in munici- palities/districts with cost-feasible impact fees and favorable raw water situations, longer entitlement and construction timelines and tighter lending restrictions. Despite some hope from the development com- munity that one positive impact of COVID-19 may be a flattening, or perhaps even reduction, in construc- tion costs, that has not been the case thus far, as the costs for lumber and steel have skyrocketed over the past year. Some municipalities also have raised their cash in-lieu of raw water fees and/or other impact fees, which exacerbates the challenges related to new attainable or affordable housing. Additionally, the potential for mortgage rates to rise over the next 24 months, the lack of vacant developed lot supply for new single- family homes, the costs to deliver new homes (many of which were mentioned above and also apply to single-family development) and the ongoing lack of significant condo development are all factors that indicate strong future demand for apartment units in the region. There are likely to be a number of would- be homebuyers over the next 24 months who cannot afford to pur- chase a home, who are not willing to stretch their budget to purchase a home or who have lost income nec- essary to qualify for a mortgage loan, all of whom will remain renters for the foreseeable future. While it is hard to predict the eco- nomic impacts of the ongoing effects of COVID-19 and the unprecedented amount of stimulus pumped into the monetary system as well as the resulting hardships many businesses are facing, the Northern Colorado Class A, institutional apartment market remains very strong. With the relatively low number of deliv- eries anticipated in the next 12-18 months, I believe this strength will prevail in the market for years to come. s jakeh@affinitycre.com Hallauer Continued from Page 8 ular construction allows for reuse of materials, fewer job-site deliveries, and less energy used on site as the construction timeline is reduced. Modular construction also features recycled elements and materials, green-build elements and enhanced insulation. This type of construction is well suited to small urban infill sites, causing less environmental impact to the building site and sur- rounding neighborhoods. As Colorado’s housing market con- tinues to proliferate, prefabricated products including precast concrete and housing modules will continue to offer a viable solution to the expedited building process. Precast inherently provides efficiency, resil- iency, versatility, durability and aes- thetic advantages needed to meet structural and architectural require- ments of this ever-growing market segment. s rjohnson@enconunited.com Schiebout Continued from Page 33 efficiency and establishes enterprise- grade security to increase the value of a property. Plus, smart-community perks set properties apart, providing a premium and elevated living experience that appeals to tech-savvy consumers. Parks Associates reported that U.S. broadband-connected households have an average of 12 connected devices. As multifamily properties are looking to both meet this grow- ing resident demand and benefit from property-managed deploy- ments, they also need to consider the network that will serve as the backbone for this solution. ManagedWi-Fi adds a valuable ser- vice to any property that drives rev- enue, increases resident experience and streamlines management. In a time when people need to connect and get the most out of their online experience, the multifamily industry must provide high-speed, reliable net- works that can be managed as easily as an electric bill. For so many resi- dents, employees and working parts, multifamily developments can avoid overcomplications and inefficiency by using managedWi-Fi while putting money in a property owner’s pocket. s joshj.rowe@dish.com Rowe Continued from Page 31