Tag Archives: Colorado Springs

First Quarter 2012 Multifamily Investing News for Colorado Springs

“The local economy showed its strongest growth in two years. The Business Conditions Index stands at 106.91, its highest value since June 2008.” Thus begins the January 2012 version of the Quarterly Updates and Estimates report published by Fred Crowley, Senior Economist at the University of Colorado at Colorado Springs (UCCS).

http://www.usafa.af.mil/cadetFocus/cadetPhotos...

In the report’s section on the multifamily market, we learn that the average rent for an apartment in September was $779, and the vacancy rate was 6.2%. The author expects the market to remain tight through 2012 as troops returning to Fort Carson will outnumber the new apartment units in the construction and planning stages.

The report also states that unemployment dropped for six months in a row compared to the previous year. The rate stood at 9.37% in December 2011.

In other local news, Seagate Properties of San Rafael, California has bought its third apartment complex in the city in the last ten months. The latest acquisition was the 310-unit apartment complex known as Sunset Creek Apartments. Located at 5400 N Nevada, it is across the street from the UCCS campus and next to the University Village shopping center. Part of the Pikes Peak Greenway trail system goes right by the complex. The new owners plan to build a new swimming pool and clubhouse, as well as upgrading the tennis and volleyball courts among other improvements both inside and out.

Seagate now owns five properties in the area totaling 685 units. The others include Copper Chase, Cascade Park Apartments, Boulder Crescent Apartments and the Fillmore Ridge Apartments. They plan to buy a total of 2,000 units in Colorado in 2013.

U.S. News & World Report recently named Colorado Springs as one of the Top 10 “Best Weekend Getaway” destinations in the country. We made the list at the number six spot largely for our “prime picture-taking real estate” as well as for being home to the United States Air Force Academy and the Olympic Training Center. The top three recommended places to visit were the Garden of the Gods, Manitou Springs and the top of Pikes Peak.

In late-breaking news, Frontier Airlines has recently announced they are making Colorado Springs one of its first “focus cities”, a term they use to represent their new focus on local markets. In January, the airline announced new non-stop flights to Phoenix, Los Angeles, Seattle and Portland, starting in May. Part of the strategy is to use larger, newer, more fuel-efficient planes on these new routes.

“They clearly see the potential in this market,” said Dave Csintyan, interim CEO of the Greater Colorado Springs Chamber of Commerce and Economic Development Corp. “I think they see this as an underserved market.”

As the economy continues to improve and more troops and visitors return to Colorado Springs, it’s looking more and more positive for investors in the region.

Related Stories:

 http://csbj.com/2012/03/08/seagate-purchases-third-complex-in-10-months/

http://coloradospringsapartmentinvestor.com/new-apartment-sales-and-construction-in-colorado-springs

New Apartment Sales and Construction in Colorado Springs

The Colorado Springs apartment market is making a strong comeback, as shown by recent sales and new construction starts.

Major investors from out of the area have recently purchased large multifamily properties in Colorado Springs. In October, Sequoia Property Partners of New York closed on the South Circle Arms, a 112-unit apartment complex built in 1969. Many new upgrades were completed in the last five years, including new 30-year roofs on all the buildings. The $5.4 million purchase price produced a value of just over $48,000 a door.

Another October purchase was of the Rustic Hills Park Apartment, one of the last large distressed properties in Colorado Springs. The 243-unit property went for the bargain price of just over $17,000 per unit, or $4.2 million.

The new owners, Connexion Asset Group of Lakewood, CO, need to address a backlog of deferred maintenance and a low occupancy rate to stabilize the property. They have a successful track record of turning around failed assets, which is why they were selected from the 15 bidders on the offering.

This past summer Advenir, a Florida-based real estate company, bought the 220-unit Briarglen Apartments for $16.3 million, or $74,000 a door. They have announced plans to buy up to 2,000 units in the Denver and Colorado Springs markets. Chief Acquisitions Manager Todd Linden says, ““We think, long-term, Colorado is a great state to invest in. There’s going to be a lot of job growth there.”

At the end of September they purchased the Cheyenne Crossings Apartments for $19.5 million, coming in at over $85,000 per unit for the 220 units.

Seagate Properties of California now has a Denver office and hopes to build their Front Range portfolio to 2-3,000 units. They already own a couple of smaller apartments in downtown Colorado Springs, and in 2010 purchased the 115-unit Fillmore Ridge Apartments for $2.8 million, or just over $24,000 a door.

After years of little or no multifamily development, several new projects are under way, or awaiting final approval.

Grading is already underway at the corner of Woodmen Road and Union Boulevard, where Denver-based Southwestern Investment Advisors and Utah-based Talos Holdings have teamed up to build a 230-unit luxury apartment complex.

Up north in Monument, local group Vision Development has begun a 177-unit complex and at the south end of town, long-time local developers, the Nor’wood Development Group, has broken ground on the 240-unit Mesa Ridge Apartments. This project is close to Fort Carson, which should continue to add troops coming back from tours in Afghanistan, as well as the aviation brigade, expected to arrive with their helicopters and support staff in 2013.

On the east side of town, near Peterson Air Force Base, there is a large mixed-use project in the planning stages that would include 450 apartment units in addition to two military office buildings, restaurants and retail space. It will be near the intersection of two major arterials, Powers Boulevard and Airport Road.

All of this new construction activity has pushed the number of multifamily permits granted this year to 407, the most since 2002, when 1,664 permits were issued. That single year had more permits issued than all the subsequent years combined. In fact, in 2009, exactly zero multifamily permits were pulled.

With 44,000 apartment units now available, this year’s total will add less than 1% to the total. With its low vacancy rate and rising rents, it’s no wonder the Springs is looking so attractive to investors and developers.

Colorado Springs #4 on Value City List – Kiplinger

In their July issue, Kiplinger revealed their list of the top ten good value cities. They began with cities that have a score under 100 on the national cost-of-living index. This means they fall below the average in what it costs to live there. The editors then visited the top cities to set the ranking.

Downtown Colorado Springs, Colorado.

Image via Wikipedia

The cities on the list ahead of Colorado Springs are Omaha, NE (1st), Charlotte, NC, and Nashville, TN. Pretty good company, I’d say.

The things they liked about Colorado Springs included the 36% of residents that are college grads, it’s a regional hub for large national employers, rental and utility rates are very low, and of course our Pikes Peak backdrop.

If you have a reason to want additional people to come to your town, being on this list is surely a good thing.

You can see the complete article here.

Here’s an additional article on Colorado Springs as a top ten town:

Colorado Springs Top 10 City for College Grads?

According to a recent article on Kiplinger.com, Colorado Springs ranks as one of the top ten cities for recent college grads. The main criterion for acceptance onto this list was a vibrant economy that is creating new jobs. In addition, each of the cities was rated on “rent affordability, access to public transportation, overall cost of living, culture, nightlife and the percentage of people ages 20 to 24.”

Image via Wikipedia

Colorado Springs was cited for having a tech-based economy and an inexpensive cost of living. Rents are low, and it’s always listed as one of the fittest cities in the U.S, possibly because of the easy access to hundred of miles of trails and open space. Compared to other cities on the list, it has a higher proportion of 20-24 year olds. Colorado Springs was also noted for its low crime rate and well-educated citizenry.

Negatives for the city were a low median income, weak public transportation, and a high-unemployment rate for the under-skilled.

The other cities on the list are New York City, Charlotte, NC, Baltimore, MD, Washington, D.C., Omaha NE, Seattle, WA, Boston, MA, San Francisco, CA, and Philadelphia, PA.

To see the original article and read more about the winning cities, visit Kiplinger.com

 

Colorado Springs Vacancies Continue to Drop

For the eighth quarter in a row, the vacancy rate in Colorado Springs has gone down, this time to 5.8%. The last time it was this low was in the third quarter of 2001 when it was at 5.4%.

As you’d expect, when the vacancy rate drops, the average rent goes up. Last year the average rent in Colorado Springs was $710. Now that same unit goes for $737, a 3.7% increase. In fact, the average rent has gone up for five quarters in a row, year over year.

These were just a couple of the facts in the new report released by the Apartment Association of Southern Colorado and the Colorado Division of Housing.

According to Ryan McMaken, a spokesman with the Division of Housing, “It’s taken 10 years for the vacancy rate to return to where it was before the 2002 recession hit Colorado, but with so little new construction, and with a continued troop presence in the region, it looks like rates may stay low, at least in the near term.”