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Multifamily Developer Inks New Office Lease as it Doubles down on Denver

A growing multifamily developer has selected the Denver Tech Center as the location for its second headquarters. 

 

The Garrett Companies, an Indianapolis, Indiana-based firm that develops, builds and manages multifamily apartments, recently leased the eighth floor of 5075 S. Syracuse St. in the Denver Tech Center for a total of 22,000 square feet. 

 

Aaron Kitch, acquisitions manager at The Garrett Companies, said the firm had been eyeing a Denver expansion and regional headquarters for a long time, but the pandemic delayed plans to grow here.

 

Some employees moved out to Colorado during the pandemic and worked remotely, and the company signed a two-year lease for about 5,000 square feet in Lone Tree. But the company quickly outgrew it, Kitch said. 

 

“With our industry, every time you get a new project, there’s construction staff that needs to be hired. There’s management staff that needs to be hired. And we had a big growth on projects over the last couple of years that just caused a need of hiring,” Kitch said. 

 

With The Garrett Companies continuing to hire new employees for its ever-growing list of developments in Colorado, the firm needed more space. Kitch said the firm looked downtown and even south of Lone Tree before landing on the building in the Tech Center. 

 

“The Tech Center just seemed to be more centrally located for everybody,” he said. 

 

The company is lightly remodeling the new office, including adding a coffee area and updating the lobby area and bathrooms, Kitch said. 

 

Kitch said The Garrett Companies has about 12 multifamily projects finishing construction in 2023 in the Denver area as well as in Colorado Springs. Denver continues to be a primary market for the company due to its rent growth and other performance metrics.

 

The company lists 22 apartment projects in various stages of development on its website in Castle Rock, Denver, Parker, Thornton, Colorado Springs, Longmont, Aurora, Centennial, Broomfield and Westminster. 

 

“Denver is just such a great market that we continue to want to expand and build here,” Kitch said. 

 

Across the rest of the country, The Garrett Companies has built more than 50 multifamily communities in 17 states, and has built more than 12,000 apartments since 2014. 

 

The type of multifamily product that The Garrett Companies builds lends itself more to suburban locations rather than downtown. Kitch said the company prefers to build surface parking instead of structured parking, and wood framing instead of steel framing.

 

Ryan Link and Harrison Archer with CBRE represented The Garrett Companies in its new lease at 5075 S. Syracuse St. 

 

“Opportunistic tenants are reaping the benefits of actively looking for space now – whether looking for short- or long-term deals,” Link said in a statement provided to the Denver Business Journal. “There is a healthy supply of product and many landlords or sublandlords are eager to get deals done and move space. Holistically speaking, it remains a very tenant friendly market.”

 

Greenwood Village-based Kore Investments purchased the 12-story office building at 5075 S. Syracuse St. for $115.2 million in 2018, according to previous DBJ reporting. 

By   –  Reporter , Denver Business Journal

Crime, Homelessness, Housing, permitting dominate DBJ Mayoral Forum

 

The impact of the issues on businesses, the workforce and the city’s overall future were the focus of the discussion.

Five of Denver’s leading mayoral candidates on Thursday began offering more detailed proposals on their plans to address public safety, homelessness and affordable housing at a forum hosted by the Denver Business Journal.

 

The five participants in the Business Meets City Hall forum — selected from a crowded field of 27 mayoral candidates with the help of local experts — were former Denver Metro Chamber of Commerce President/CEO Kelly Brough, Colorado State Senator Chris Hansen, Colorado State Representative Leslie Herod, former Colorado State Senator Mike Johnston and Councilwoman At-Large Debbie Ortega.

The three issues that took the spotlight in the forum top the priorities of almost every one of the hopefuls vying for the city’s top elected post to succeed term-limited Mayor Michael Hancock. The impact of these issues on businesses, the workforce and the city’s overall future were the focus of the discussion.

 

Below are some of the ideas pitched by forum participants.

Public safety

Speaking on the issue of public safety, most of the candidates agreed that the next mayor must enable the hiring of significant amounts of new police officers.

 

Johnston specifically said he wants to bring 200 more onto the payroll, while other candidates said the key is to step up recruiting that has left recent cadet classes short of hoped-for numbers. Johnston said that he would seek to make incoming cadet classes 50% female to make the city’s security force look more like its population, and Herod said she specifically hopes to beef up the number of investigators in the city police department.

 

But several candidates said too that a key to lowering the rising levels of crime downtown would be to bring more people back to the city center and make it livelier, as the number of workers occupying downtown offices remains at 56% of pre-pandemic levels. Brough, the former president and CEO of the Denver Metro Chamber of Commerce, said she would push to offer tax incentives for companies seeking to convert office space to residential space, while Herod said that she would spend her first 100 days bringing in businesses that have left the city and see what the city can do to bring them back.

 

“The businesses shouldn’t be doing this alone. Downtown Denver Partnership shouldn’t be doing this alone,” Herod, a Democratic state representative said.

Homelessness

In speaking on homelessness, Brough was the only one of the five candidates who came out in support of enforcing the city’s long-standing urban-camping ban, saying she would look again to ban tents popping up on streets and move their inhabitants either to shelters or, if shelters are full, to supervised camping sites where social workers can reach them and offer help. She added that she would move the city’s homelessness services division next to Denver Human Services, so the divisions could work together to see which residents are in danger of becoming unhoused and then get services to them to prevent that from happening in the first place.

Both Hansen, a state senator, and Ortega, an at-large city councilwoman, said the city must take advantage of the 250 beds that soon will open for mental health and substance abuse treatment at the former Ridge View Youth Services Center, and Ortega said she would like to use the state facility as well to reskill occupants and prepare them for jobs.

Johnston, a former state senator, called for the creation of 1,400 new permanent supportive housing units, including micro-communities of 40 to 60 tiny homes spread throughout the city, while Herod stood apart from the group by saying the pieces for getting folks off the streets already are in place through initiatives like the STAR program that sends social workers out to deal with them.

 

“We’ve already been doing this work, but it’s time to double down,” she said.

Housing

When it came to attainable housing — a subject high on business leaders’ priority list as some struggle to recruit workers because of the high cost of living in Denver — Johnston offered arguably the most ambitious plan, saying Denver can build 25,000 new units and make them permanently deed-restricted to remain affordable. The city also can help people build equity to buy homes by offering it money back for that purpose when they pay rent, and it can launch a fund to help potential homeowners get access to down payments.

Both Ortega and Herod suggested that Denver should use public land, particularly land it owns to put up affordable units, with Ortega saying it can partner with modular-home companies that can build more cheaply and quickly. Herod said she would seek to draw down more federal housing vouchers and let the voucher recipients keep a certain percentage of the money themselves if they create a city-approved economic sustainability plan and put it toward savings to buy a house or launch a small business.

 

Hansen said that he would seek to link housing-development approvals more closely to transit lines — including a rapid bus transit line he called for building out along Colfax Avenue — to allow more people to be able to live in Denver without a car. And Brough said she would seek to move beyond just the current allowance of accessory dwelling units in certain neighborhoods and create neighborhood-specific plans that allow for diversification of the types of allowable housing there to create a wider price range of housing options citywide.

Permitting

One other area on which candidates agreed is the need to streamline and speed up permitting of both commercial and residential properties, which Herod noted now can take 18 months or more. The issue is key because it’s one that many candidates feel the next mayor more on their own without approval from the City Council, whether by directing hiring toward appropriate departments or changing the tenor of city officials to prospective building projects.

 

Ortega, for example, said she would start by requiring permitting officials to be present at city buildings and be able to interact with the public rather than working remotely. Brough and Herod said they immediately would add employees to the permitting department, and Hansen said he would work to clear the backlog of permits immediately, even if that required hiring more contractors to get through them, as a way to generate economic activity.

 

But Herod went further and said she would look to set a maximum length of time for the permitting process — say, six months or so — and then would require the city to pay a portion of the costs that developers accrue because of the delays. And Johnston said he would set a hard 90-day deadline for all permitting activities, barring the practices of different departments adding new conditions once a permit seeker has addressed all concerns previously laid out to them.

 

“We have vacancy savings from the fact that some positions are unstaffed right now,” Herod said. “Why haven’t we redirected that money where it’s needed most?”

By   –  Senior Reporter, Denver Business Journal

How you can Finance your Home Renovation

Outdated kitchen. Overrun backyard. Unusable basement space. If you have a home renovation project on the mind, the first thing you have to consider is how you are going to finance it. Here are the most common options to make your dreams become a reality.

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Cash

Paying in cash is the most straightforward financing option, just save until you have enough money to cover the expenses. This will help eliminate spending outside your budget; however, it can also extend your timeline.

Mortgage Refinance

If you’ve been making payments on your home for a few years and your interest rate is higher than current market rates, you may be eligible for a mortgage refinance, reducing your payments and freeing up some money.

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Cash-Out Refinance

You can tap into your home equity and borrow up to 80 percent of your home’s value to pay off your current mortgage plus take out more cash to cover the renovations. This option is encouraged only when you’re making improvements that will increase the value of your home, as it can add a lot of interest and fees.

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Home Equity

Getting a home equity line of credit allows you to borrow money against the value of your home. You receive usually up to 80 percent of your home’s value, minus the amount of your loan.

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Retirement Funds

Homeowners can consider pulling money from a 401K or IRA account, even though they aren’t specifically meant to cover a home renovation. This option might incur additional penalties or tax payments, but may be worth it when making improvements that will benefit them financially in the long run.

Shape

Million Dollar Morning Routine

Create a morning schedule

Physically write down the things you’d like to complete in the morning and set a time for each. Then stick with it. Once you force yourself out of bed early one or two weeks consistently, you’ll find it gets easier and easier to do.

Let the light in

Whether natural or artificial, light tells your brain its time to get up and get going. If your room lacks large windows where you can open the blinds up, consider investing in a timed lamp or alarm clock with a light.

Prep and eat breakfast

Although there are many of us who chose the skip breakfast, it is key to perking up your energy in the morning. Try prepping protein-focused meals the night before or grab a yogurt or fruit and try to consume it right after you wake.

Get your body moving

Whether it’s a short walk around your neighborhood or a rigorous 5:30 am spin class, getting your blood pumping will help wake up your body and has a ton of other benefits, like stress and anxiety reduction.

Feed your mind

Stimulate your brain and do something you enjoy first thing in the morning. Try reading a favorite book, catching up on the news, doing daily meditation, or setting intentions.

“Your day is pretty much formed by how you spend your first hour .”

Ever wish you could become one of those rare morning people? The ones that wake with a start, feeling refreshed and energized. The ones that get in that morning workout or wrap up some work before many of us even hit the snooze button for the first time. Here are five tips to help you achieve that early bird status!

To learn more about how to start your day successfully, we recommend the book “The Miracle Morning” by Hal Elrod.

Read Now

2022 Year End Market Report

2022 marked a fast shift in the real estate market. For several years prior, interest rates as low as 2‐3% attracted more buyers, and “cheap debt” spiked demand and pushed Denver real estate prices to new heights. Denver fast became a relatively expensive US market with the average home price nearly hitting $820,000 by Q2 of 2022. Buying homes was very competitive and it wasn’t uncommon for a listing to have several offers within the first few days of hitting the market.

 

Worries about inflation and the waning power of the US dollar have become a huge concern, in addition to rising prices due to supply chain issues through COVID and the Russian war against Ukraine. As a reactionary solution, the Federal Reserve began to raise interest rates sharply to cool the economy. They anticipate that rates will remain high until The Committee hits its inflation goal of 2 percent. Even at the cost of a recession.

 

With rising mortgage rates hitting 7%, along with the natural seasonality of the market, we did see inventory levels rise in spring and summer with a peak of 8,496 homes in September which spurred predictions of a shifting market favoring buyers. However, inventory dropped to just 4,454 homes by Q4. With rates being much higher, many homeowners with mortgages below 4% decided to remain in their homes or convert their houses to rental properties. This increased rental inventory for both long-term leases and short‐term vacation rentals in the Denver Metro area.

As a result, we saw the average detached home sale prices in December drop down to $702,000. We also saw a slowdown in rent increases to an average of $2,600/month for a 2-bedroom in Denver. However, although prices went down month to month in 2022, with the low inventory levels, Year over Year appreciation was still 11%!

 

Lastly, I want to note the opportunity that awaits us in 2023. It’s predicted that mortgage rates will stabilize as inflation begins to slow down. Since inventory will remain low, experts do not foresee a huge crash or drop in prices so appreciation may remain flat. However, as more motivated sellers hit the market, this will be a great opportunity for home buyers and investors to purchase favorably this year and refinance later once mortgage rates drop. n addition, there has not been a better time in years for sellers to take their time in selling their house while having great negotiation power in purchasing a replacement home. Massive wealth is created in shifting markets, so we never want to waste an opportunity such as this. Be sure to reach out to me directly so we can come up with a long-term game plan for your real estate portfolio.

Download Market Report >>

Apartment Investors Apply More Scrutiny to Deals in Wake of Market Slowdown

Demand for apartments plummeted in the national apartment market in the third quarter, coming off what had been several quarters of strong run-up in demand and rent growth for the national multifamily market.

 

In fact, apartment demand turned negative last quarter, the first Q3 in at least 30 years that such a phenomenon occurred, according to RealPage Inc. The summer months are typically strong for the for-sale and rental housing markets, making the Q3 drop in demand this year particularly significant.

Net demand was -82,095 units in Q3 among the markets tracked nationally by RealPage, bringing year-to-date net demand to -47,143 units. Negative demand means more renters moved out of than into apartments during a specified period.

 

Jay Parsons, head of economics and industry principals for RealPage, in a statement accompanying the report said soft leasing numbers and weak home sales point to low consumer confidence. People tend to go into wait-and-see mode during periods of uncertainty, he also said.

 

It’s possible, too, record rental-rate growth across the U.S. observed in the past 18 months, up until the end of this summer, has more renters doubling up to split the rent.

 

There’s a record number of apartments under construction across the U.S., prompting questions of whether the sudden slowdown in apartment demand will affect that pipeline, as well as future investment decisions by capital groups and developers.

 

Carl Whitaker, director of research and analysis at RealPage, said in an email that a performance slowdown will almost certainly cause investor groups to reassess their view on the marketplace but it’ll take something more drastic than a one- or two-quarter period of moderation for groups to significantly adjust their approach to acquisitions and dispositions.

 

“Multifamily’s share of total (commercial real estate) investment grew steadily even in the pre-pandemic cycle, and the past two or so years have only further solidified apartments as a highly coveted space for investor groups,” he added.

 

There are some 917,000 apartments under construction, by RealPage’s count — the most on record since the company began tracking the market in the early 1990s.

 

Whitaker said what’s most likely to influence a construction slowdown are external economic factors, such as rising interest rates and supply chain challenges. Even with the performance slowdown and record amount of construction, he said it would take a prolonged and significant pullback to influence development appetite measurably.

 

Zoom town slowdown?

 

One area of the market where at least some investors could slow development and investment as they tighten the screws on deals: real estate markets that boomed during the pandemic but are hitting the brakes hard.

 

Boise, Idaho, may be the poster child for such a market, with home values at $323,897 in March 2020, peaking at $515,378 in March 2022, which has since fallen to $502,547 in August, according to Zillow Group Inc. (NYSE: ZG). The typical observed market rental rate in Boise went from $1,333 in March 2020 to $1,886 in August 2022, according to Zillow.

 

The housing market has cooled very rapidly in Boise in recent months, although rental rates have yet to decline. They grew only 0.2% between July and August, though.

 

Sean Robertson, originations and underwriting director at New York-based Churchill Real Estate, said his company looked at tertiary markets that boomed in the wake of remote work during the onset of the pandemic. Churchill typically focuses on workforce-housing deals, or properties that can rent at or below 140% of the area median income.

 

But, ultimately, those pandemic boom markets didn’t make sense for investment — and less so now.

 

“Those markets were very difficult to comp,” he said. “A lot of developers were going in, overpaying for land, looking to be the market leader as far as amenity packages, finishes … (I)t hasn’t really been battle-tested yet.”

 

Like many others in multifamily, Churchill has been keen to finance deals in established Sun Belt markets, such as Austin, Texas, and Phoenix. With the cost of capital higher now, and companies like Churchill taking a harder look at which deals to move forward on, high-growth markets in the Southeast and Southwest are places it still feels good about, Robertson said.

 

But Sun Belt cities are becoming more suburban in nature, following migration trends and where more affordable projects can be pursued. Places like Katy or McKinney in Texas — about 30 miles from Houston and Dallas, respectively — are some of the places Churchill recently closed deals on.

 

It’s also targeting affordable metros on a relative basis, such as the Inland Empire in southern California, and markets that’ve undergone an industrial boom in the past few years.

 

When a deal in the Lehigh Valley of Pennsylvania first crossed his desk, Robertson said, it was a “no” initially. But after checking out the area, one of the most prolific warehouse markets in the U.S. that services much of the Northeast, his team’s thinking changed.

 

“There was not much supply of Class A or even B-plus apartments,” he said. “The housing stock was very old but you saw every industrial REIT sign up, massive (buildings) out there employing thousands of people. They need a place to live.”

 

Other investors that bet on small cities and towns that grew rapidly in light of the pandemic still see potential for some of those nontraditional markets — if there’s a sustainable growth story.

 

Chicago-based Pangea Mortgage Capital closes multifamily loans across the U.S., particularly for acquisitions and rehab deals. It’s a subsidiary of Pangea Properties, which owns about 13,000 apartments nationally.

 

Some of the apartment deals Pangea closed on recently were in places like Moscow, Idaho; Bend and Eugene, Oregon; Kennewick, Washington; and San Luis Obispo, California.

 

“There’s been a flight, I think, in the post-pandemic world to some of these non-urban areas, somewhere where there’s a work-life balance,” said Michael Bachenheimer, director and head of West Coast originations at Pangea Mortgage Capital. “There’s a whole argument to be made that the five-day workweek, where you’re in an office all five days, is slowly eroding.”

 

It’s particularly relevant for the tech sector, with those companies pulling back on their office plans as more of their employees are working remotely permanently. Some tech workers who once lived in the pricey Bay Area or Seattle have moved to places like Eugene, Oregon.

 

Tertiary markets tend are generally less competitive and offer better value plays and more yield, Bachenheimer said, but certain markets work for specific reasons.

 

Moscow, Idaho, for example, is home to the University of Idaho, which provides continued housing demand from the university as well as their suppliers.

Tertiary markets — perhaps, especially, ones on the fringe of larger metropolitan areas — may continue to be popular with apartment investors and developers, as affordability pushes people farther out or to new markets. And while the permanence of remote work is still debated, if a greater number of people have more choice in where they live, that can spur demand in new cities or towns.

 

When examining deals now, Bachenheimer said, there are no areas off the table, but because of the Federal Reserve’ position to continue to raise interest rates, Pangea is more closely examining the exit underwriting.

 

“A lot of deals, while they look great today, they don’t look good two to three years from now,” he continued. “We’re cutting leverage on the front end.”

 
 
By   –  Editor, The National Observer: Real Estate Edition,

Real Estate Investors, Bracing for Recession, Prepare to Seize on Potential Distress

The growing threat of a recession and deal slowdown in the wake of higher interest rates has some real estate groups preparing to seize on potential distressed opportunities.

KRISANAPONG DETRAPHIPHAT, GETTY IMAGE

The growing threat of a recession and deal slowdown in the wake of higher interest rates has some real estate investors preparing to seize on potential distressed properties or loans.

Real estate insiders say much of the investment market remains in a stalemate and price-discovery mode — some sellers aren’t willing to adjust pricing, and buyers are applying more scrutiny around deal terms and where they invest.

A lot of capital was raised in 2020, at the onset of the Covid-19 pandemic, in anticipation of a wave of distress, which mostly didn’t materialize. But now recession threats and rapidly raising interest rates have increased the potential for distress in the coming months.

 

“There are funds and groups coming together that want to play in the distressed market,” said George Mitsanas, principal at San Francisco mortgage banking firm Gantry Corp., which has an $18 billion portfolio of serviced commercial mortgages spanning more than 2,100 loans nationally.

 

Mitsanas said he also expects family offices to see opportunity. “A number of my clients are billionaires where their leverage has always been low, and they have a tremendous amount of capital … If there’s a disruption in the marketplace for good deals, I think the family offices will swoop in and start increasing their real estate holdings,” he said.

 

The office market is commonly cited as the property type that may face the biggest issues, which could present opportunities for those looking to buy distressed properties.

 

Estimates of how much office building values may decline because of pandemic changes to work vary. One recent analysis by the Mortgage Bankers Association found, if widespread hybrid work persists, companies would need around 80% of the office space they previously needed, resulting in building income and values dropping 10% to 20%.

 

Distress isn’t apparent yet, although there are warning signs. Trepp LLC’s commercial mortgage-back securities’ special servicing rate rose to 4.94% in September, a hair higher than the August rate of 4.92%. Loans enter special servicing when financial issues arise, affecting a borrower’s ability to stay current on payments.

 

Trepp noted in its report that September CMBS data reflects market suspicions that August was an inflection point for specially serviced loans.

 

“The office sector has a large concentration of loans with near-term maturities and tenants with expiring leases,” it said. “Lockdown periods during the pandemic displayed the ease at which companies can implement a work-from-home policy, and if many of the major tenants in the office sector shed their leases and opt to implement a full or hybrid WFH model, this could have a major impact on the CRE market.”

 

Looming maturities and lease terminations are starting to be reflected in the special-servicing numbers, according to Trepp.

 

Scott Sherman recently launched Torose Equities, a Miami company targeting value-add deals, including office buildings, in the Southeast.

 

Sherman said, since the pandemic, he’s been looking to buy office properties, a sector where he hasn’t seen many active buyers, given the questions over remote and hybrid work’s long-term impact.

 

“That’s where I’m seeing the best opportunities,” he continued. “Looking forward over the next year, with rates rising, there’s going to be a lot of potential distressed situations to take advantage of.”

That doesn’t exclusively mean distressed properties, but also potential issues when owners can’t refinance maturing debt.

South Florida is somewhat of an anomaly, as companies continue to relocate there, Sherman said, fueling demand for office space. But in other places, the outlook is cloudier.

 

Real estate dislocation

 

The level and depth of distress in any property type is impossible to ascertain. But most market observers aren’t predicting a repeat of the global financial crisis fallout for commercial real estate in the late 2000s.

 

The political environment, both domestically and abroad, are also wild cards for what happens in the broader economy. The war in Ukraine and outcomes of the U.S. election are creating uncertainty, Mitsanas said, and questions investors have to ask include whether there’s going to be an energy shortage this winter.

 

“Are interest rates going to stay high? What about inflation? Those uncertainties have people nervous,” he said.

 

But, he added, most real estate owners have plenty of reserves if a rainy day becomes a storm.

 

Adam Ducker, CEO of Bethesda, Maryland-based RCLCO Real Estate Consulting, said in the past month or two, it’s become a more commonly held view there will be distress.

“It may not be 2009 levels of distress but enough to change investment strategy, create a new fund, reposition something,” Ducker said. “There’s been a meaningful change around the energy of this in the last 30 days.”

 

While office space gets a lot of the attention, Ducker said the market is bracing for real estate dislocation in general.

For example, in the multifamily market, which has been on fire during the pandemic, deals that closed at high values and low capitalization rates won’t necessarily see distress but are pricing so differently now than they did less than a year ago. It’s become more difficult to refinance or get construction financing, Ducker added, which may present opportunities.

 

“At the moment, there’s a historically high level of money that’s been earmarked for real estate investing that hasn’t been invested,” he said.

 

Office sector one to watch

 

Workspace Property Trust out of Boca Raton, Florida, recently closed on a $1.1 billion portfolio deal that included 8 million square feet of suburban office space in 14 U.S. markets.

 

It was notable for its size but also because it exclusively included office space.

 

It was a challenging deal to close because of rapidly escalating interest rates. Workspace recently had a deal-closing party for the portfolio and handed out replica mallets because the sale was like whack-a-mole to get to the finish line, said Roger Thomas, Workspace co-founder, president and chief operating officer.

 

“We were able to craft together alternative balance-sheet financing, which many people had suggested we would never get that accomplished,” Thomas said. “We managed to get it done. If it had gone much longer, I’m not sure if we would have been able to hold it together.”

 

Such is the environment now for most commercial real estate deals, even for property types like industrial and apartments.

Roger Thomas is co-founder of Workspace Property Trust.

WORKSPACE PROPERTY TRUST

But Thomas said he remains bullish on suburban office’s future — given demographic shifts to the suburbs and an increasing unwillingness to commute long distances multiple days a week — and is looking for opportunities.

 

And there’s not a lot of competition in the suburban office buying market right now, Thomas added, as many public real estate investment trusts have pivoted from office more broadly.

 

“In this challenged market, you’re not going to see people starting up at this stage in the game,” he said. “They’re going to wait for the markets to come back.”

 

He said it’s possible his company will go through a bit of a quiet period as the markets settle. But because some owners will be coming up against debt maturities, that can be where a company like Workspace can get a deal done.

 

Sherman, who previously started Tricera Capital LLC, a real estate company that bought retail properties as that sector went through a repositioning, said buying potential or outright distressed properties requires creativity and figuring out how each deal is different.

 

“Borrowers that now have this issue are going to be faced with a choice: Do they give back the keys, put in more capital or find some other potential way to fill the hole?” he said. “I think that’s where I’d like to try to find opportunities, where we come in and fill that hole.”

 

 
By   –  Editor, The National Observer: Real Estate Edition,
 Updated 

Denver housing market approaching balance for first time in 16 years, say Realtors

The market is moving toward “a win-win experience” for buyers and sellers, according to a new report.

                                                A home for sale in Centennial, Colorado.

                                                CAITLIN HENDEE | DENVER BUSINESS JOURNAL

Denver metro’s housing market continues to creep ever closer to balance, according to the latest monthly report from the Denver Metro Association of Realtors (DMAR). The shift is impacting all levels of sales, including the $1 million and up “luxury” category.

 

The end of September saw active listings increase to 7,683, a 10.72% increase from August and a 93.48% increase from September 2021. Month over month, sales volume decreased by 6.38%, and pending sales declined by 15.41%. Closed properties saw a sharp decline from last year, at 27.6%, with 4,113 residences closing in September. Average days on the multiple listing service (MLS) hit 26 days in September, a 100% increase from last year, according to the report. 

 

Despite Denver Realtors seeing price reductions happen in desirable areas where they haven’t seen price reductions since the pandemic, some metrics are still on the rise; the median close price in September was $580,000, a .87% increase from August and a 9.43% increase from September 2021. 

 

In the report, Realtor Libby Levinson-Katz described Denver as moving towards a balanced market, something the city has not seen in more than 16 years. 

 

“A traditional cycle for the Denver real estate market is seven years. Due to an economic crash and a global pandemic, the cycles were extended, but a correction is needed,” she said. “The market is entering a period of neutrality where the bullish ways of extreme markets make way for a stage of compromise, with buyers and sellers working together for a win-win experience.”

 

After a year of questioning whether $1 million homes should be considered luxury properties in Denver, that category of homes is seeing significant shifts.

 

According to the DMAR report, home inventory to last the market less than three months creates a seller’s market, while home inventory that lasts the market more than six months creates a buyer’s market. The market for attached homes costing $1 million or more hit 2.83 months of inventory, just on the cusp of exiting the seller’s market category. Similarly, detached homes in the $100,000 to $199,999 are getting close to leaving a seller’s market, as it stands at 2.75 months of inventory. 

 

Realtor Colleen Covell commented in the report that although the numbers may technically show the luxury market as still in a seller’s market, she’s seeing something different. 

 

“We are experiencing full inspection objections, price reductions, no competing offers, no appraisal gaps and even contingent offers. The question on everyone’s mind is are we finally in a luxury buyer’s market? The technical statistics may say ‘not yet,’ but it sure feels close,” Covell said in the report. 

 

More luxury home sellers (those with properties worth $1 million or more) listed their homes in September, at an 18.86% increase than in August, while the attached luxury market saw a 66.67% increase in new listings from the prior month. Total, 649 homes hit the market last month. The luxury market is seeing quite the influx of inventory, with 5,962 new listings so far in 2022.

 

The average days on the market rose month over month for the luxury market, 31.82% and 40% for detached and attached homes respectively, giving buyers more time to decide to make an offer. Pending sales also dropped in September, as did the close-price-to-list-price ratio, according to the report. 

 

A Redfin report recently found that price drops are becoming increasingly common in the luxury home category — yet a Denver home recently listed at $28.9 million, which would be a high-water mark in residential sales here.

 

DMAR includes the metro counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties in its monthly real estate reports. The organization pulls data from REcolorado.

 
By   –  Reporter , Denver Business Journal

TAKE 5: WHAT TO NEGOTIATE WHEN BUYING A HOUSE

Whether you are a first-time homebuyer or a seasoned veteran, the negotiation part of the transaction can be a little daunting and stressful. However, it is necessary to ensure you are getting the best possible deal for your money. So, what should you negotiate when buying a home?

  1. Closing costs. Your closing costs are determined by a variety of factors, but you can expect it to be between 2% to 5% of the purchase price. Ask the seller to cover some or all of the closing costs upfront or request a closing credit that can be used to make specific updates and fixes to the home.

 

  1. Furnishings. Love how the seller has furnished and decorated the home? Buyers often negotiate keeping couches, fixtures, landscaping items, patio furniture, appliances, and more. And many sellers agree, wanting to make the home more appealing.

 

  1. Inspection and closing timing. Buyer offers that include a quick inspection and close timeline are often more attractive to sellers who have been going through the process for far too long. Just ensure you allow yourself ample time to get your financing in place and complete proper, thorough inspections.

 

  1. Home warranty. Sellers will often agree to pay the premium on the home warranty at closing and then hand it off to the new homeowner, who is responsible for the deductible on any future claims.

 

  1. Repairs. Your inspection may uncover small or large repairs needed to bring the home up to standard. You can negotiate to have these items fixed before closing or ask for a price reduction to cover the costs.

MUST-HAVE TOOLS FOR HOMEOWNERS

  1. Cordless drill. A cordless drill is a must-have for installing cabinets, drawer pulls, hinges, picture frames, shelves and hooks, and more. Whether it’s for do-it-yourself projects or repairs, you’ll use your cordless drill just about every month.

 

  1. Drain cleaners. Shower and bathroom sink drains are susceptible to clogs because of the daily buildup of hair and whisker clippings. You can use chemical clog removers like Drano, but they’re expensive and the lingering chemical scent is unpleasant. Instead, buy some plastic drain cleaners that can reach into the drain to pull out the clog of hair and gunk. You can purchase them on Amazon or at a local hardware store for a low price.

 

  1. Shop-vac. No matter how careful you are, spills and accidents will happen and there are some tasks that just can’t be handled with paper towels or a standard vacuum, like pet messes or broken glass.

 

  1. Loppers. Even the minimum amount of care for your landscaping will require some loppers to remove damaged branches, vines, thick weeds, and any other unruly plants in your yard.

 

  1. Flashlight. You’re going to want something a little more powerful than your iPhone flashlight when you’re in the crawlspace!