Apartment market improves
John Rebchook, Rocky Mountain News
Published April 26, 2007 at midnight
If you're a renter, it might be a good time to lock-in a long-term lease at a Denver-area apartment, if you're landlord will let you.
The average vacancy rate has fallen to a six-year low for a first-quarter, while average rents are down slightly, according to a report released today by Gordon E. Von Stroh, professor at the Daniels College of Business at the University of Denver.
Typically, when occupancies rise, so do rental payments.
Von Stroh's survey shows that the overall vacancy rate in the first-quarter stood at 7.1 percent. The last time it was lower during a first-quarter, it stood at 4.5 percent in 2001.
The vacancy rate is slightly higher than the 7.0 percent in the fourth quarter, "but that is statistically insignificant," said Steve Rahe, an apartment broker with CB Richard Ellis.
Meanwhile, the average monthly rent for all apartment was $842.69, down slightly from the $843.38 a year earlier and $849.89 in the fourth quarter.
The median, or middle rent was $794.25 compared with $792.97 in the first quarter 2005.
Rahe said owners of "Class A and Class B" buildings are telling him that concessions are slowly starting to go away in many buildings. He said that there are still a lot of concessions available for Class C, or the oldest buildings, with fewer amenities. The Class A and Class B buildings are newer ones that often sport features such as swimming pools, health clubs, theaters, and covered parking.
With limited new construction this year – primarily "niche" projects, such as those along light rails or part of "lifestyle" shopping centers such as Southlands in Aurora, Rahe said he expect vacancy rates will continue to drop.
And that will mean a boost in rents, he said. It also will mean that landlords increasingly will be favoring six-month rent agreements, instead of one-year rents, he said.
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