Bisnow (Denver) posted an article stating that from 2011 to 2012 apartment prices of properties with 100 units or less rose almost 34%. They attribute demand to low vacancy and rising rents.
“The Denver market has exploded,” Greg (here with his partner Kyle Malnati) told us during a chat this week. From 2001 to 2011, the average price per apartment unit in Denver climbed from $61k to $70k, a healthy rise. In 2012? The average price skyrocketed to $94k (specifically apartment buildings of 100 units or fewer). What’s driving it: a perfect storm of investor demand, low vacancies, rising rents, and an overall lack of product for sale. (A storm like this means it’s rainin’ cash.) Vacancies haven’t been this low since before the dot-com bust, he says. [Read more…]
It appears from this article that investors with cash are seeing the benefits of commercial real estate. Most industry experts agree that apartments are one of the safest asset classes to use as an inflation hedge. The short duration of their leases allow landlords to adjust rents regularly as property values rise.
What do you think is driving the demand?
As always you can call me to talk about building wealth through real estate at (925) 385-8798.