Information provided in this report is obtained from published sources such as the Colorado Department of Labor and
Employment, CoStar.com, RealComps, and the Apartment Vacancy and Rental Survey, which is conducted for the
Apartment Association of Metro Denver by University of Denver professor Gordon Von Stroh. James Real Estate Ser-
vices, Inc. also conducts independent research, including public records, conversations with planning and permitting
officials of the various cities and counties in the metropolitan area, developers, and regular visits to development
sites.
James Real Estate Services, Inc. makes every attempt to ensure accuracy but information cannot be guaranteed.
Comments, suggestions and any corrections should be directed to Eric Karnes, editor of the Apartment Perspective,
at 303/316-6772.
Methodology
Volume 1, 4
The Apartment Perspective
Page 8
James Real Estate Services, Inc.
We are beginning to witness developers postponing or dropping plans for new apartment communities in the face of
steadily weakening market conditions. Most of this decline in new construction is occurring in upscale communities in
suburban submarkets where vacancy rates are highest. Activity is increasing in the "affordable" section of the market,
especially in areas close to blue collar and service-oriented employment.
Until demand returns the apartment market in metro Denver is likely to continue to soften. The supply side of the
equation is improving as the pipeline begins to empty, but there are still over 9,500 units under construction in metro
Denver that will be completed during the next nine to twelve months, so the apartment market is likely to remain de-
pressed until at least late 2003.
Forecast 2002
(Continued from page 7)
Condominium conversions generally remove units from the rental inventory, since most buyers are owner-occupants,
at least initially. In some cases, however, investors acquire converted units to maintain as rental investments.
During the 3rd Quarter of 2002 investors were active in purchasing small apartment buildings. A total of 40 buildings
of two to 49 units were sold in metropolitan Denver during the quarter, with 15 of those transactions involving Denver
County properties, followed by Adams County with 10 sales. The average sale price of small buildings during the 3rd
quarter 2002 was $57,027 per unit. Prices were highest for small buildings in Boulder County. No sales were re-
corded during the 3
rd
quarter in Broomfield or Douglas counties. During the first nine months of 2002 a total of 194
small buildings were sold in metro Denver.
Most of the small apartment buildings sold were purchased by local investors who normally hold the properties for
some time. Others, especially in central Denver neighborhoods like Capitol Hill, were acquired for conversion to con-
dominiums.
Information about sales and conversions is obtained from published sources, including Comps.com and RealComps
and from buyers, sellers, or converters and should be verified for accuracy.
Apartment Sales During 2nd Quarter 2002
(continued)
