Why Denver
First and foremost Mountain Capital Group believes it is exigent to know the market. This is why we have concentrated on the Western United States, with most emphasis on California and Colorado. We believe at the current time that Metro Denver, Colorado and some surrounding areas are ripe for a surge in growth.
Why Denver
- A friendly business environment
- A highly educated work force
- A Dynamic City that is continuing to rebuild and improve infrastructure, transportation and amenities.
In terms of apartment markets we believe that Denver, Colorado represents a viable market. Some of the reasons are outlined below:
• Metro Denver has a young, educated urban population due to all the university campuses located there. Typically this age group, unless married and wanting to have a family, prefers living in the urban core and does not want to purchase a home in the suburbs;
• Fewer people are buying a home today. Potential homebuyers are fearful of their employment status, whether or not their next job will be located nearby or if it will entail moving or commuting longer distances. Denver Metro area is one of those cities where people draw the line at any commute longer than 20 minutes, unlike Los Angeles or San Francisco where commutes of one hour or more are tolerated;
• The vacancy rate for metro Denver area apartments dropped to 4.1 percent mid 2011 for the Central Denver area – its lowest level in more than 10 years-according to reports from the Apartment Association of Metro Denver and the Colorado Division of Housing;
• Market rents in the metro Denver Central Area apartments increased 1/2% percent mid 2011 from the previous year.
Scarcity and Demand. A record low number of multifamily units will be completed this year nationally. The increase in rental housing demand was fueled by a sharp reduction in the supply of new apartments being built. Just to put this into perspective, over the 10-year period from 1998 through 2008, there was an average of about 240,000 new rental units completed per year. Last year, 160,000 units were built. And this year, project completions are expected to be below 80,000 units, which would make it a 50-year low. Metro Denver had 520 building permits issued in the Denver-area in the first six months of 2011which is 69.4 % more than the 307 permits pulled from January through June 2010. Historically, the Denver market needs to add about 4,500 units each year just to keep up with demand.
Based on our analysis, we believe that central Denver, Boulder and selected suburban markets offer unique apartment investment opportunities combined with favorable low rate financing creating an excellent opportunity to purchase, rehabilitate and liquidate projects thereby generating strong returns for our investors in the next 5 to 10 years.
