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NoCo apartment market sees ‘explosive’ absorption in Q3

Copperleaf Place was the only Northern Colorado apartment community over 50 units to sell in the third quarter.

A record number of apartment units were absorbed in Northern Colorado in the third quarter, keeping the vacancy rate in check even as new supply hit the market.

“Absorption can only be described as explosive, with 664 units absorbed this quarter, exceeding the record 415 units absorbed during the second quarter of 2017 by 60%,” Apartment Insights said in its third-quarter Apartment Trends summary. The summary includes properties with 50 or more units in Fort Collins, Weld County and Loveland.

The overall vacancy rate for stabilized, conventional properties ticked up to 4.2% during the quarter. However, the overall vacancy rate including properties in lease-up decreased by 300 basis points to 10.06%. That is despite a record increase in inventory over the past two quarters, according to Apartment Insights’ Cary Bruteig.

“There were 1,005 units added to the rental inventory over the past two quarters which was a record two-quarter increase. The real standout was 831 units being added to the rental inventory just last quarter,” he said.

“Although the construction pipeline remains full, record-high absorption reduced the overall vacancy by a huge amount this quarter,” the Apartment Trends Summary stated. “The strong performance over the summer leaves the rental market in good shape as it heads into the slower winter season.”

All four Northern Colorado submarkets – Fort Collins North, Fort Collins South, Greeley and Loveland – contributed to record absorption, according to the report.

The average monthly rent climbed to a new high of $1,352 per unit, a $15 increase from the second quarter and $42 higher than a year ago.

The Fort Collins South submarket had the highest vacancy rate during the third quarter at 5.16%, while Weld County has the lowest number of vacant units at 3.43% vacancy.

Featured in CREJ’s Oct. 16-Nov. 5, 2019, issue

Kris Oppermann Stern is publisher and editor of Building Dialogue, a Colorado Real Estate Journal publication, and editor of CREJ's construction, design, and engineering section, including news and bylined articles. Building Dialogue is a quarterly, four-color magazine that caters specifically to the AEC industry, including features on projects and people, as well as covering trends…