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Apartment vacancies fall outside Denver

By John Rebchook, Rocky Mountain News (Contact)

Published March 18, 2008 at 2:11 p.m.
Updated March 18, 2008 at 2:11 p.m.

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The overall state apartment vacancy rate for major metropolitan areas outside the Denver area fell to 8.6 percent at the end of last year, compared with 10.4 percent a year earlier, shows a report released today by the Colorado Division of Housing.

By city, the vacancy rates stood at: Colorado Springs, 10.8 percent; Fort Collins/Loveland.4.6 percent; Grand Junction, 1.7 percent; Greeley, 7.2 percent; and Pueblo, 7.1 percent.

Of the five cities, only Pueblo showed a drop in average monthly rental rates for all units.

The overall monthly rent for all units in Colorado Springs rose to $703.82 from $691.24; Fort Collins, $767.72 from $752.14; Grand Junction, $603.22 from $624.78; Greeley, $631.19 from $623.99. In Pueblo, the average monthly rental rate fell to $470.65 from $478.91.

Gordon Von Stroh, the author of the report, said that the apartment markets outside of Denver are following the local economies.

“The bright spots are Colorado Springs, Fort Collins and Grand Junction,” Von Stroh said. “Even before the energy boom on the Western Slope, Grand Junction was doing well because of all of the retirees there. And CSU is a great research university, which has helped the Fort Collins area.”

By contrast, the economies in Pueblo and Greeley “are on hold,” said Von Stroh, principal of Colorado Economic and Management Associates and a business professor at the University of Denver.

Terrance Hunt of Apartment Realty Advisors, one of the sponsors of the survey, said that a lot of homes are being foreclosed on in Greeley, which is hurting the apartment market.

“What has happened is a lot of the single-family homes have gone into foreclosure, which has left a really cheap stock of homes and an empty stock of homes,” Hunt said. Those homes, he said, are put on the rental market at low rates, creating a “significant shadow rental market” to compete with traditional apartments, he said.

Colorado Springs, by contrast, is doing well and could do even better if more soldiers return to the city.

“There is almost no new construction there, so if there’s a huge influx of soldiers returning to Colorado Springs, there could quickly be a shortage of units,” Hunt said.

The overall average rent per square foot ranges for these five metropolitan areas range from a low of 70 cents in Pueblo to a high of $1 in Fort Collins/Loveland. Rent per square foot is generally the highest in efficiency apartment units and the lowest in three-bedroom units.

In the five communities, rental rates are generally lowest with two- to eight-unit buildings. Nine- to 50-unit structures and 51- to 99-unit buildings are in the midrange of rates. And rates are highest in the largest buildings (100 units and up). Rents are based on the units being unfurnished, with residents paying gas and electricity.

In addition to the housing division and Apartment Realty Advisors, the survey’s sponsors include Pierce-Eislen and Countrywide Commercial.