Denver Apt. Vacancies Expected To Rise As New Supply Wave Hits Market
The strong flow of investor capital funding a wave of new apartment supply in Denver doesn't appear to be letting up, with construction starts on three new projects announced on Monday of this week alone.
Developers and financiers announced new apartment projects in Northeast Park Hill and the Cherry Creek submarket of Glendale, CO, even as Behringer Harvard announced it has kicked off construction of a 212-room luxury apartment project in downtown Denver in the Arapahoe Square/Ballpark area.
As new construction starts and permits tick up rapidly, a wave of new apartment supply is rolling into Denver and other early recovering markets such as Dallas-Fort Worth, Houston, Washington, D.C. and Seattle. CoStar economists have predicted these markets will see some of the steepest apartment vacancy jumps in 2013.
Behringer Harvard Multifamily REIT I is financing the 21 Lawrence project at 21st Street and Lawrence Street on the north side of downtown. Construction of the five-story project, which will include a two-level parking facility, began this month with Behringer Harvard's developer, Foster City, CA-based Legacy Partners Residential Development, Inc., at the helm. The project is slated for completion in fall 2014.
Also on Monday, a partnership led by the Urban Land Conservancy (ULC) announced the $6 million acquisition of 9.4 acres at Smith Road and Colorado Boulevard in Northeast Park Hill to develop Park Hill Village West, a 156-unit affordable housing project.
The project in partnership with The Piton Foundation, Gary Community Investment Co., the City of Denver and U.S. Department of Housing and Urban Development (HUD) uses $3.7 million from Denver's Transit-Oriented Development (TOD) Fund.
In another project, HFF announced today that it has arranged joint venture equity through an institutional investor on behalf of MKS Residential LLC for the development of Solana Cherry Creek, a 341-unit multifamily development in Cherry Creek.
The four-story building with a five-level parking garage on 5.3 acres at 801 South Cherry St. is forecast for completion in 2016 and is targeting LEED Gold certification.