CREJ

Page 30 — Multifamily Properties Quarterly — February 2022 www.crej.com Marshall Fire tion launched a housing directory, listing vacant units available for immediate move-in in metro Den- ver. The directory will help families displaced by the Marshall Fire eas- ily navigate Colorado’s tight rental housing market, filtering between units based on location, size and price. In some cases, rental housing communities are offering discounted rents, free first months and waiv- ing move-in fees. Discounts vary by community. As of Jan. 10, rental communities across Denver have listed more than 2,100 units on the directory. To view listings, visit www. caahq.org . This directory was created in part- nership with the Boulder Area Rent- al Housing Association, which has worked diligently to help displaced families in Louisville and Superior. The BARHA housing directory lists vacant units available for immedi- ate move-in across Boulder County. BARHA also is collaborating with local community partners, including the Estes Park Visitors Bureau, Boul- der Convention & Visitors Bureau, Boulder Chamber, University of Colorado Boulder, Boulder area real estate agents and the Red Cross to share the directory with all families in need. As of Jan. 10, the directory listed more than 400 vacant units in Boulder County. To view listings, visit www.barhaonline.org. We encourage all rental housing providers in metro Denver and Boul- der County to utilize these resourc- es, posting their vacant listings and sharing the directories with friends and colleagues. Losing one’s home is an impossibly difficult experience, and with thousands of Coloradans displaced, it is our responsibility to unite in support of them. We’re grateful to all the housing provid- ers offering discounts to residents in need, and we’re overwhelmed by the response and generosity of our members. n Financial relief. In addition to these housing directories, there are several charitable organizations work- ing to support residents of Louisville and Superior. The Resident Relief Foundation, an organization with a long history of supporting resi- dents experiencing financial disaster, launched a Colorado fund for rent- ers suffering income loss during the COVID-19 pandemic last year. It will provide rental assistance grants directly to residents displaced by the Marshall Fire. RRF’s work is incredibly valuable, and we encourage anyone with the financial means to con- tribute to its Colorado fund at www. residentrelieffoundation.org and click “Donate,” and then “Colorado Apart- ment Association.” Additionally, the Apartment Asso- ciation of Metro Denver has donated $25,000 to the American Red Cross’ Marshall Relief fund, and is collect- ing donations from AAMD members through the Apartments Giving Back program. For all money raised through this program, AAMD will donate an additional 5% to organizations work- ing to help those displaced by the Marshall Fire. n First responders. American Red Cross chapters in Colorado also provide vital disaster relief services across the state, and over the next several months, the bulk of their efforts will be concentrated on devas- tated communities in Boulder County. To support the urgent humanitarian needs of displaced Coloradans, make a financial contribution to the Ameri- can Red Cross in Colorado. In the midst of a natural disaster, we all have a duty to do what we can to help those in need. For more informa- tion on how you can support victims of the Marshall Fire, please reach out via email to cdean@aamdhq.org. s cdean@aamdhq.org Continued from Page 1 hikes throughout 2022. Denver specifically faces an extremely large supply pipeline with approximately 32,000 units under construction and another 58,000 units in the planning stages. If all these planned units were delivered – notwithstanding the impact of labor shortages, rising construction costs and backlogged municipalities – Denver’s apartment inventory would increase by 25%. Despite these large supply figures, Denver should be able to absorb these new units given the significant housing shortage the metro area continues to face. The headwinds facing the multi- family industry should be consid- ered and may have some impact on property performance and pricing in 2022. Nevertheless, the robust economic conditions throughout the sector will help to keep the industry on solid ground as we look ahead. s courtney.crowder@nmrk.com Crowder Continued from Page 4 Though apartment demand for the year did not overperform recent years to the same extent as in some other markets, annual net absorption was the second highest of the last five years. This demand, coupled with a decline in new supply compared to 2020, sent annual effective rent growth above 15%. The otherworldly rent gains were seen across the region, but the Denver area fueled the apartment demand increase – espe- cially the metropolitan submarket of Five Points/CBD/Capitol Hill. One caveat is that the greater Den- ver area’s strong year obfuscated the underperformance of areas like Colo- rado Springs from a demand perspec- tive. These areas may have been more impacted by the rapid growth in rents as well as residents moving back into denser parts of the state after leaving in 2020. Overall, 2021 was a strong and positive follow-up to a rocky 2020 for the area, and many of the contribut- ing factors that led to those results appear poised to carry over into 2022. Though the annual numbers are unlikely to be quite as strong, demand should continue to feed rent gains in the new year. s jordan@alndata.com Brooks Continued from Page 6 world, Colorado was on the posi- tive side of the population shift with an increase of 38,355 new residents between April 2020 and July 2021. A second parallel migration pattern saw people leaving expensive coastal markets for nearby, less expensive secondary markets. Colorado Springs benefitted from this trend to the tune of 14.7% in overall rent growth with lifestyle rent growth increasing by 14.1%YOY, and renter-by-necessity jumping 15.2%YOY. Meanwhile, the Denver metro area experienced strong occupancy growth at 95.5% through November of last year for buildings with 10 or more units as vacancy hovered at 5.65%. Denver area YOY rent growth hit the double digits at 13.5% as of December 2021. Forecasted rent growth for the year ending 2021 is expected to regis- ter at 14.2% (as of Dec. 29). Year-over-year job growth in the Denver area was 5.6% as of October. Additionally, multifamily sales transactions soared not only over 2020 in the Mile High City as well as over 2019 totals. Deal velocity jumped from 195 in 2020 and 227 in 2019, to 362 in 2021. Huge jumps also were seen in pric- ing, with the 2021 average sales price increasing by 27.22% over 2020 and 28.16% over 2019. The average price per unit surged by about 34.91% over 2020 and 34.41% over 2019. The average 2021 price per square foot jumped 26.19% over 2020 and 40.93% over 2019. The average cap rate compressed over half a basis point over 2019 to end the year at 4.83%. n What’s ahead in 2022. Despite considerable challenges in 2021, the year ended strong, with an estimated annualized 6% expansion in the fourth quarter. Economists expect growth to con- tinue in 2022 at an estimated 3.7% average pace in the first half of the year. According to Bloomberg, the last expansion delivered an average quar- terly growth of about 2.3%. Barring another variant or COVID- 19 surge, the unemployment rate is expected to drop below 3.5% by the end of 2022 to reach a historical low. This would further tighten the labor market, leading to continued recruit- ing challenges. In turn, this could further impact construction costs and existing sup- ply chain bottlenecks and delays. Additional hurdles in the develop- ment arena could prompt investor interest to advance its shift to exist- ing assets. This trend was jump- started with the influx of vacancies by big boxes and further hastened by the pandemic as developers seized the opportunity to acquire and repur- pose/redevelop well-located and increasingly vacant malls, hotel prop- erties and office buildings as a way to cut costs and timelines. Overall, strong economic conditions bode well for the multifamily asset class as a whole. Renters are expect- ed to continue their return to urban core areas. Savvy owners and devel- opers will keep an eye out for the new generation of renters by cater- ing to their needs in building design, finishes, operational technology and amenities. Going forward, investors need to be on the lookout for continued infla- tion and slightly higher interest rates. The challenge will be getting creative to not only get deals done but also be at the right place at the right time to source opportunities in a hyper- competitive market. Establishing and nurturing a rela- tionship with a broker entrenched in the market will be essential in finding the right deals and avoiding the alluring trap of buying for fear of missing out. s asmith@capstone-companies.com Smith Continued from Page 8 Quick Stats Report, CoStar A snapshot of Denver metro area average pricing Quick Stats Report, CoStar Denver metro area sales activity for the past three years