Q1 2019

THE MULTIFAMILY
INVESTOR
Your Local Apartment Advisors
102 N CASCADE AVE, SUITE 250,
COLORADO SPRINGS, CO 80903
t. 719.598.3000 | www.olivereg.com

SUMMARY IREM Economic Forecast Breakfast

Entering Q4 2018, the only obstacle preventing a
continued bull run in our local multifamily investment
market centered on expectations that interest rates
would continue their steady climb of eight increases
over the prior three years. While the Fed Funds Rate did
increase by another quarter point late in December,
expectations of 2019 rate hikes shifted radically the Last month Adam and Stuart presented their 2019
last week of January. In fact, at the press briefing Multifamily Outlook at the IREM Economic Forecast
following the Fed meeting Jerome Powell would not Breakfast. For those unable to make it to our
even commit to whether the next rate change would presentation, we’ve created a video to get you all
be up or down. caught up. Just visit the link below!

bit.ly/COSmultifamily19-1
This shift may lend itself to a strong cautionary stance
in light of economic slowdowns in Europe and China,
international trade tensions, and other unknowns, such Absorption, Net Deliveries & Vacancy
as Brexit. But close to home, strong fundamentals in
800 8.0%
the Colorado Springs apartment market lead us to
believe that the bull run will continue for multifamily 600 7.5%

investments well into 2019. This will likely relieve the 400 7.0%
upward pressure on cap rates we have begun to see,
200 6.5%
while at the same time instilling further confidence over
alternative investments, such as the stock market. 0 6.0%

-200 5.5%

MULTIFAMILY Statistics -400 5.0%

2018 Q3 2018 Q4 -600 4.5%

2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4
Rent $1,051 $1,049
Absorption Net Deliveries Vacancy
Vacancy 6.1% 6.3% Source: CoStar Group, Inc.

Number of Sales (12 mo.) 65 56 HIGHLIGHTS

Total Sales Volume (12 mo.) $559,152,000 $597,952,000 ►►12 Month Absorption is 489 units, with -84 units
absorbed in 18Q4
Average Price/Unit (12 mo.) $137,911 $140,861
►►12 Month Rent Growth was 3.0% in 18Q4; this time
Median Price/Unit (12 mo.) $87,500 $92,500 last year it was 5.3%
►►12 Month Net Completions were 419 Units, down
Under Construction 2,121 1,748 from 841 this time last year
Source: CoStar Group, Inc. ►►The average vacancy rate increased to 6.3% in
18Q4; was 6.1% in 18Q3

OLIVE REAL ESTATE GROUP, INC The Multifamily Investor

www.olivereg.com
MULTIFAMILY RENT & SALES
Key Statistics
Vacancy, Asking Rent & Rent Growth Total Sales Volume & Avg. Price/Unit
$1,200 6.0%
$700M $210K
$600M $180K

$1,000 4.0% $500M $150K

$400M $120K
$800 2.0% $300M $90K

$200M $60K

$600 0.0% $100M $30K

$0M $0K
-1.0%
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 2013 2014 2015 2016 2017 2018
Asking Rent Vacancy Rent Growth Total Sales Volume Average Price/Unit (12 mo)
Source: CoStar Group, Inc. Source: CoStar Group, Inc.

2018: Fourth Quarter Sales

Property Name Zip Code Sales Price Price/Unit # Units Sale Date
Creekside at Palmer Park 80915 $72,500,000 $221,037 328 12/7/2018
Elevation Apartments Rent 80917 $65,800,000 $241,912 272 12/19/2018
Advenir at the Village 80918 $51,100,000 $164,839 310
Colorado Springs Multi-Family 11/9/2018
Woodland Hills 80918 $27,000,000 $168,750 160 12/7/2018
Fireside ApartmentsFrom 2015-2017, Colorado Springs produced some of
80915
the strongest rent growth in the nation, an average
While rent growth has moderated, the concession
$13,600,000 $125,926 108
environment remains highly favorable. During the full
11/20/2018
Carefree Village Townhomes
annual increase of nearly80917
7%, while metros $12,875,000
targeted by year 2018, discounts $201,172
of at least one-month's free 64
rent 12/28/2018
developers earlier in the cycle largely saw rents come were tied to 3% of all available apartments, one of the
Meadows Point Apartments
back to earth (such as Denver).
80905 lowest rates in the country. In fact, only two of the largest
$10,250,000 $91,517 112 12/17/2018
(Portfolio Sale) 100 metro areas in the country had a lower incidence of
But Colorado Springs, now at the onset of its largest such concessions (Sacramento and Oxnard). Nationally,
Eagleview Apartments 80909
supply test to date (that will stretch through at least$8,750,000 $134,615
about 10% of all available apartments were tied to65 a one- 12/21/2018
Academy Manor 2019) has finally seen rent growth start to moderate. In
80920
2018 rents by about 3% year-over-year, now in-line
month discount in 2018.
$7,550,000 $117,969 64 10/10/2018
Mesa Vista Apartments with the national average.80817
In the North and Northwest $4,200,000
El This does represent an $87,500
uptick from 2016, when 48 10/19/2018
Paso County submarkets (where virtually all of the active concessions of at least one-month's free rent were tied
development is located), rents grew by closer to 2%
Source: CoStar Group, Inc. to a mere 1% of all availabilities (then the lowest level in
year-over-year, a sign of supply beginning to have an the country), but concessions nonetheless remain well
***Disclaimer*** Some sales may
impact. not be recorded at time of publishing and are not listed
controlled, and outsized discounts almost nonexistent.

Asking Rent Per SF

DAILY ASKING RENT PER SF

Source: CoStar Group, Inc.

Contact us if you’re interested in learning more about the Colorado Springs market or are considering purchasing or selling a property
in the next few years. We have qualified investors seeking to purchase properties of all types from $500,000 to $50 million. We also
provide Broker Opinions of Value and Financial Reviews. 719-598-3000

The Multifamily Investor

MULTIFAMILY CONSTRUCTION

Property Name Address # Units

Springs at Allison Valley 11320 New Voyager Hts 300
Crowne at Cordera 9124 Grand Cordera Pkwy 276
Crowne at Briargate 9110 Crown Springs Vw 272
Watermark on Union 9915 N Union Blvd 243
Copper Range 7535 Copper Range Hts 240
Enchanted Springs Apartments 3075 Tutt Blvd 200
Cascade Apartments 609 S Cascade Ave 183
La Bella Vita Phase II 4986 Amarosa Heights Dr 146
Greenway Flats 31 W Las Vegas St 65
Casa Mundi 418 S Tejon St 27
Source: CoStar Group, Inc.;
Colorado Springs and El Paso County Planning and Development

UNDER CONSTRUCTION

PROPOSED

RECENTLY CONSTRUCTED

NEWS ARTICLES
FREDDIE MAC RESEARCH PROJECTS STRONG 2019
MARKET - MHN 01/16/19
"Freddie Mac expects another strong year for the
multifamily market in 2019 with solid rent growth -
projected at a nationwide average increase of 4 percent
- and vacancies continuing to perform at historical
averages…origination volume is estimated to grow to
$317 billion from about $305 billion in 2018..." Freddie
Mac estimated it's been 10 years since the cost to own
was lower than the cost to rent, and the cost to own has
increased 60% since that point compared to rent growth
of 30%. Colorado Springs is expected to be one of the top
10 markets for gross income growth in 2019.
PROGRESSIVE INSURANCE LOOKS TO HIRE 1,100
EMPLOYEES IN COLORADO SPRINGS [IN 2019]
- KRDO 01/24/19
Progressive announced in a press release that it is
planning to hire 10,000 employees in 2019, with 1,100 in
Colorado Springs. These positions will include customer
service, sales, and IT. According to the press release, the
company has grown more than 50% in the last 3 years.
THE SHUTDOWN IS OVER, BUT THE PAIN FOR LOW-
INCOME FAMILIES LINGERS -NBC NEWS 1/29/19
While HUD employees when back to work on January
25th, it’s going to take some time to get back on
track and extend funding for Section 8 vouchers and
contracts. As of 1/30, the government is only funded
through February, and this uncertainty has caused the
department to freeze vouchers currently waitlisted until
they receive greater assurances that HUD will receive
necessary funding. This will continue to create uncertainty
for tenants and landlords who rely on government
funding for rent.
JOB GROWTH EXPECTED DESPITE POTENTIAL
DOWNTURN - CSBJ 01/04/19
Colorado Springs is less reliant on the defense industry
than in years past, and should be more resilient should
there be a downturn this year. Last month there were
over 13,000 current job postings with a median salary
of over $80,000, higher than the national average of
$75,300. The state's minimum wage increased to $11.10,
which may incentivize more people to re-enter the
workforce.

OLIVE REAL ESTATE GROUP, INC

Visit www.olivereg.com for more information
THE MULTIFAMILY INVESTOR

RECENT APARTMENT LISTINGS WHY Use your Local Broker?

Downtown Apartments
EXCELLENCE
G
N DIN 210 Pueblo Ave.,
PE
Colorado Springs, CO 80903
• Completed in 2017
• Located in the heart of downtown,
with nearly 30,000 employees
• 5 large units with premium finishes
Top Sales Firm: 2013, 2014, 2016, 2017
• Excellent location near restaurants, Top Sales Broker: 2014, 2016, 2017
craft breweries, and coffee shops
• Private garages and incredible
views

G Lelaray Apartments
IN
EN
D 2115 Lelaray St., Best in Business Award
P
Colorado Springs, CO 80909
Economy Best Commercial Real Estate Firm:
• 48 Units
Colorado Springs Multi-Family 2014, 2015, 2017, 2018
• New tapered roof system, vinyl
YEAR OVER YEAR JOB GROWTH
windows, newer boiler, security EXPERIENCE
gate, LED exterior lights, and
Since 2012:

$130
parking lot sealcoat

Over million
in multifamily sales

75+
ING
Fountain Pointe multifamily
D 312 W. Alabama Ave.,
EN
P
Fountain, CO 80817
transactions

• 24 Units
• Refinished roof, newly painted
exterior, interior remodels
LOCAL EXPERTISE
• Across street from brand new We are the ONLY team based
Fountain Middle School campus
in Colorado Springs that focuses
• Walking distance from planned
grocery store exclusively on Multifamily
Investment Properties!
Source: Moody’s Analytics

Demographic Trends
DEMOGRAPHIC TRENDS
Working with a local broker adds
Current Level Current Change 10-Year Change Forecast Change (5 Yrs) valuable insight to help maximize your
Demographic Category Local U.S. Local U.S. Local U.S. Local U.S.
investment dollars. An inside track on
Population 739,797 329,197,205 1.4% 0.7% 1.7% 0.7% 1.2% 0.6%
developments in the commercial real
Households 278,357 126,789,305 1.6% 0.9% 1.3% 0.8% 1.6% 1.0%
Median Household Income $68,968 $63,828 3.5% 3.6% 1.9% 2.1% 2.2% 2.8%
estate market, first-hand knowledge of
Labor Force 358,107 162,881,653 4.3% 1.3% 1.4% 0.5% 1.5% 0.8% troop deployments and insight on job
Unemployment 3.5% 3.7% 0% -0.4% -0.3% -0.4% - - growth are just a few of many things that
Source: Moody’s Analytics
have substantial impacts on investment
POPULATION GROWTH LABOR FORCE GROWTH INCOME GROWTH property in both the short and long term.
Put this knowledge to work for you.
To learn more about the Colorado Springs market
or to receive a free Broker Opinion of Value or
Financial Review, Call Us at 719-598-3000

Source: Moody's Analytics

102 N Cascade Ave, Suite 250 1/25/2019

Colorado Springs, CO 80903
Copyrighted report licensed to Olive Real Estate Group - 912813.
Page 16

t. 719.598.3000 f.719.578.0089
www.olivereg.com Stuart Sloat Adam Rezner
stuartsloat@olivereg.com arezner@olivereg.com

Olive Real Estate Group, Inc. Copyright 2018. Information contained herein, while not guaranteed, is from sources deemed to be reliable. Prices,
terms and information subject to change. S:\Admin\@Multifamily\4-Newsletters\2019\Q1\OREG-MultifamilyInvestorNewsletter-Feb2019-4pg