Low vacancies spur multifamily flurry

Looking for an apartment in Northern Colorado? Chances are the hunt could be lengthy, the pickings slim and the rents high.
But that could all change as a prevailing vacancy rate of about 3 percent in Northern Colorado appears to be spurring the market for new apartment complexes. One of the most ambitious projects is planned for Loveland’s Rocky Mountain Village, the 550 acres of land owned by McWhinney Colorado Enterprises at the northeast and northwest quadrants of Interstate 25 and U.S. Highway 34.
The landowner has city approval for up to 500 apartment units on the property. If buildout is achieved, it would be the largest apartment complex north of the Denver metropolitan area.
Chad McWhinney, president of McWhinney Colorado Enterprises said his development company expects to break ground on apartments in the Gateway during the summer of 1996, with 160 units to be built during the first phase of construction.
In Loveland, where there are about 2,900 multi-family rental units, not including subsidized housing, vacancy rates are about 3.4 percent, and rents average $464, according to a Colorado Department of Local Affairs and Denver University survey conducted in September.
In Fort Collins, where there are about 11,000 multi-family rental units, not including subsidized housing, vacancy rates are about 2.7 percent and average rents range from $311 for an efficiency to $642 for a two-bedroom, two-bath unit.
The W.W. Reynolds Cos., best known for office and light-industrial complexes, began construction on its second Fort Collins apartment project earlier this fall. A portion of the $14 million, 210-unit MiraMont Apartments, near Harmony Road and Lemay Avenue, should soon be available for occupancy.
Reynolds vice president Jerry Lee said that even as recently as the second week in September, vacancy rates at the larger Fort Collins apartment complexes were less than 2 percent. Over the last 24 months, the vacancy rate has at times dropped below 1 percent and moved no higher than 2.7 percent, a promising statistic for apartment leasing and management companies.
“In the apartment market, if you’ve got a 5 to 6 percent vacancy rate, you’re happy,” Lee said.
Reynolds recently sold the Pine Cone Apartments, a 195-unit complex completed in 1994, off Timberline Road between Horsetooth and Drake roads. When the sale closed, the complex was 99 percent leased.
Lee said Reynolds will manage and lease the MiraMont complex, where rents are expected to fall into the mid-$600 and high-$700 range for one- and two-bedroom units. The 15-building project includes exercise and meeting rooms, a library and study and an outdoor pool and whirlpool. It is located adjacent to the Miramont Sports Center and is within walking distance of the OakRidge Office Park, as well as shopping and dining.
“It is a location that in our opinion is superior to any in Fort Collins,” Lee said. “We think it’s going to do very, very well.”
In Greeley, where there are about 7,400 multi-family units, not including subsidized housing, vacancy rates are even lower, hovering right around 1 percent, according to the Department of Local Affairs.
Rents in Greeley range on average, $300 for an efficiency to $572 for a three-bedroom unit. Developers have shown a lot of interest in apartments, though Greeley Community Development Director Becky Safarik said few multifamily permits have been pulled, and few large developments have been proposed.
A 288-unit development was in the works for ground near the intersection of U.S. Highway 34 bypass and 35th Avenue. But that deal crumbled in late December, and the St. Louis-based Heitner Co. has placed the property back on the market.
A second apartment project is in the works for central Greeley. That project will involve the sale of a city-owned piece of property to a Florida developer.
Estes Park boasts several projects under construction, including two complexes marketed by Janet Romer of Four Seasons Realty. Interest in the Canyon Creek and Willows projects has been brisk – and surprising, she said.
“We thought we’d be dealing with people coming from out of town, but we’ve had more local people who are downgrading because they don’t want a large home anymore,” Romer said. “That wasn’t the market we thought we were going after.”