Investors Keenly Interested in Colorado Springs Apartments
- Apr 14, 2015
Colorado Springs, Colo.—Denver’s one of the more robust apartment markets in the nation, but a new report by Colorado Springs-based apartment specialist Commonwealth reported that investor interest in secondary-market Colorado apartment properties (such as Colorado Springs) is quite strong as well. Altogether, investment sales of apartments in Colorado Springs in 2014 totaled just over $475 million—a record.
The 2014 total compares with $166.6 million in 2013, $177.8 million in 2012, and $125.5 million in 2011. Sales in the first quarter of 2015—the total of two transactions—was $60.9 million, which is about the same as it was in Q1 2014. Commonwealth pointed out that customarily first quarter sales are the slowest of the year, so it’s likely that sales will be strong again for the rest of this year, if not record-breaking again.
Why the increase in demand for Colorado Springs properties? The report posited a number of reasons. One is that the city is growing at a considerable pace: according to a Pitney Bowes survey, its population is projected to grow 6.2 percent—adding nearly 15,500 households—in the next five years. That compares with Denver, which isn’t in the top 50 for percentage growth, but is No. 15 in the nation for projected absolute growth over the same period.
The Commonwealth report also noted that demand has caught up with supply in the Colorado Springs market. The fourth quarter saw an addition of 456 units to the market, putting the total for 2014 at 716 new units. That’s more than in 2013 (568 new units) but fewer than in 2012, which had the most (870 new units) since 2003.
The report predicted that the number of new units added to Colorado Spring’s inventory in 2015 will “not be greater than the prior economic cycles.” The hotspot for new development is the Upper Northwest submarket, whose new properties are achieving higher rents than existing communities.