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25 years of rental trends

John Rebchook, Rocky Mountain News

Published July 27, 2006 at midnight

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The year was 1981.

Oil hit $34 a barrel. Millions of viewers tuned in to watch the prime-time TV soap opera Dynasty, which followed the exploits of the fictional Carrington family of Denver.

Denver was in the early stage of an unprecedented building boom fueled by an energy industry boom.

And 1981 was the year Ray Baker hired Gordon Von Stroh, a young University of Denver professor, to launch a quarterly analysis of the metro-area apartment market.

On Wednesday, Von Stroh, a professor at the Daniels College of Business at DU, released his 100th quarterly report, marking 25 years of taking the market's pulse.

The report not only tracks easy and obvious data such as rental and vacancy rates, it also dives into details such as rent per square foot, rental losses and vacancies by size, age and county. The report - soon to be available on the Web - overflows with graphs, charts and maps.

"I've seen similar reports in other cities, and they do not begin to compare in detail and depth of information that you can find in Gordon's report," said Baker, principal of Gold Crown Management. "I've gotten calls from people from all around the country who have seen and heard about the report and want to do something similar."

Baker, president of the Apartment Association of Metro Denver in 1980 and 1981, wanted someone outside the industry to track the market objectively.

"We were drawn to Gordon, and I mean this in the most respectful way, because he is a bit of an egghead professor. He even looks like a professor," Baker said. He knew if the association did the report internally, skeptics would think the data were pumped up.

"Over the years, Gordon has reported both the good news and the bad news," Baker said. "His educational background and his association with DU just spoke volumes to his credibility."

Von Stroh received his doctorate in economics and management from the University of Oklahoma in 1967, the same year he joined DU. He said the apartment market has changed dramatically over the past 25 years.

"Back in 1981, we were just starting to see the first larger apartment communities being built," Von Stroh said. "It was still very much a ma and pa business. You had a lot of 40-unit buildings in Capitol Hill, for example."

Back then, no one spoke of apartment buildings as "communities."

"In a modern apartment community you don't have to belong to a health club, because you'll have a great athletic facility. You can work from home because they have great business offices. They have media rooms, microwaves, garages and granite in the kitchens," he said.

And while the average monthly rent has risen almost 160 percent in the past quarter-century, when the numbers are adjusted for inflation, the difference doesn't look as big.

Steve Rahe, an apartment broker with CB Richard Ellis, has heard praise for Von Stroh's report from clients and counterparts across the country.

"I think it is remarkable that one person has been working on one project for 25 years consecutively," he said.

Then and now, the Denver-area apartment market at a glance

Year Average monthly rent Vacancy rate Total units

1981 $326 ($729 inflation adjusted) 1.7% 165,573

2006 $844 ($377 in 1981 dollars) 6.9% 279,497Source: Gordon Von Stroh

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