April 2011 COLORADO - Rental Housing Journalrentalhousingjournal.com/archives/colorado0411.pdf ·...

The Multifamily Applicant Risk Index (MAR Index) is published quarterly by CoreLogic® SafeRent® and is based exclusively on traffic credit quality scores from their statis-tical screening model (Registry ScorePLUS®). This quarterly report provides property owners and man-agers in Colorado with a benchmark with which to compare their portfo-lio’s performance. The first quarter national MAR Index, including stu-dios, one-, two-, three- and four-bedroom units, was 99.

Here is how Colorado performed in the first quarter compared to last year:

• Colorado Springs, CO: 1Q11 MAR Index = 91

• Colorado Springs, CO: 1Q10 MAR Index = 94

• Denver-Aurora-Broomfield, CO: 1Q10 MAR Index = 100

• Denver-Aurora-Broomfield, CO: 1Q10 MAR Index = 99

The MAR Index is derived from the statistical scoring model from CoreLogic SafeRent, which is the multifamily industry’s only screen-ing model that is both empirically derived and statistically validated. With this unique applicant risk index, property managers and owners are

able to compare their applicant cred-it quality trends with that of the average MAR Index trends. This comparison indicates whether their portfolio is performing above, below or at market levels with respect to attracting and securing applicants with higher credit quality and an increased likelihood of fulfilling their lease obligations.

The Multifamily Applicant Risk Index (MAR Index) provides trends of national and regional traffic credit quality scores whereby a lower index value indicates an applicant pool with a higher risk of not fulfilling

Vacancy: 5.40%Metropolitan Denver’s average

vacancy rate for stabilized communi-ties, having 50 units or more, remained at 5.40% during the first quarter of 2011. However, the rate is a healthy 1.53 percentage points below a year ago.

Vacancy for all properties, includ-ing those in lease-up and out-of-ser-vice, declined 38 basis points (bps) this quarter to 6.05%, also a 10-year low.

Areas:Vacancy is lower than 6% in 25 of

32 submarkets. The Boulder County submarkets of Boulder North (BON),

Boulder South (BOS), and Longmont (LNG) held three of the lowest five vacancy rate positions in the metro area. Brighton (BRI) and Capitol Hill (CAP) held the other two spots. The best five submarket vacancy rates ranged from 2.64% to 4.13%.

The highest submarket vacancy rate of 11.97% occurred in Aurora Northeast (ANE) – the fourth quar-ter in a row this district has achieved the high mark. The only other sub-market with a rate over 10% was Denver Northwest (DNW), increas-ing a large 447 bps this quarter to come in second highest at 10.39%. Two of the larger properties in this

mostly Class C submarket reported large increases in vacancy.

AgeWhen grouped by decade of con-

struction, properties built during the 1990s have the lowest average vacan-cy of 4.98%, down a modest 6 bps from last quarter. The 1980s group posted the largest decline this quar-ter of 21 bps, and had the second lowest rate of 5.17%. Properties built during the 2000s increased 20 bps to 5.61%, exceeded only by 1970’s prod-uct at 5.95%. All groups are now below 6% vacancy.

Improving Denver Apartment Market Poised For Further Gains

DENVER METRO • COLORADO SPRINGS • BOULDER

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Observing fundamental principles accounts for success in all investments. If you’re involved in the stock market, perhaps you focus on the Price Earn-ings (PE) ratio of the stock you want to buy. In the mortgage industry certainly creditworthiness and a repayment abil-ity standard play critical roles as fun-damental principles. When analyzing a loan application for development or refinancing of commercial or residen-tial rental real estate, you face a field of factors that must be brought into bal-ance. What is the credit standing of the borrower? What are the investment objectives? How will the borrower achieve and maintain initial and con-tinuous cash flow and thereby meet repayment ability standards? A suc-cessful analysis must not only identify the investor goals, but also whether or not investor policies and practices will assist in achieving them.

“It is all about the ability to repay the loan and cash flow from collection of rents that determines repayment capacity. The higher the quality of those cash flows (e.g. tenant creditwor-thiness) the more stable the cash flows should be. Stable and recurring cash flows underpin a good loan.” Joe Con-nors, Commercial Banking, Pacific Continental Bank.

Rental income, without exception, is critical to repayment ability. After the analysis, these are the challenges. In the US today there are over 38,000,000 residential rental units. It is estimated that the residential rental population hovers around 88 million. Typical rental situations present just under 20 objective lease infraction possibilities. Violation of three, in particular, accounts for over 12 billion dollars that rental owners and managers lost in 2009. This loss is not static. It increases minute by minute. While only five per-cent of the residential rental population of 88,558,000 is responsible, the total loss is staggering and shared by all investors. Can 12 billion dollars in lost rental revenue, that’s $32,876,712.32 dollars lost per day, have an effect on repayment ability? Could it destroy investment objectives? No matter how well thought out, average rental income losses of just under one million a day can turn a very good looking loan into a disaster.

Sustained cash flow and applicant screening should be considered synon-ymous.

Continued on page 8

Fundamental Principles

and Twelve Billion Dollars

Colorado's First Quarter 2011 Insight Into Multifamily Applicant Risk Index

Continued on page 3

Continued on page 3

Jay Harris, Vice President of Business Services, CoreLogic SafeRent

Professional Publishing, IncPO Box 30327Portland, OR 97294-3327

PRSRT STDUS Postage

PAIDSnohomish, WA

Permit #5

Current Resident or

Maintaining critical cash flow.Statistics are from the Apartment Insights first quarter survey of over

185,000 units in the 7-county Denver metro area.

veryone in the property man-agement business knows cer-

tain times of the month are exception-ally busy. Even managers and leasing people who are experts at scheduling will occasionally get “double booked” or swamped with “drop in” visitors. Being able to handle more than one thing at a time and to do so graciously, is just part of the job description in this industry. Here is a question that came up at a leasing seminar:

Q: When I am really busy at the end of the month I occasionally have two or three people show up at the same time to see an apartment. If none of these people have an appointment is it okay to give them all a group tour?

A: This is a dilemma that everyone will eventually face if they are in the business of renting apartments. However, keep in mind that it’s a posi-tive thing when people are “flocking in” to see your apartments. It means your telephone skills, advertising and/or curb appeal are all working to draw

prospective renters into your commu-nity. On the other hand, assisting more than one person at a time presents a special challenge, as no two people have the same needs. Also, there will be times when your prospects are mov-ing for reasons they wish to keep pri-vate. These and other factors like “who arrived first” and “who needs to move the soonest,” must be taken into account before deciding if a group tour is in order.

I would encourage you to imagine that your busy office is the emergency room of a hospital. Stay calm, confi-dent and in control as you do “triage” to assess the basic needs of your pros-pects and establish priority. Remember: Not everyone is in a “life threatening” situation, and some people can wait. Hold onto your sense of humor as you explain that you want to assist every-one, but there is only one of you and three of them so you will need their help. Ask each party to fill out a guest card with their contact information, along with the size apartment they need and desired move date.

Collect the cards and quickly deter-mine which prospect(s) can and can-not wait. For example, if one of your visitors does not need an apartment for two months, then you can encour-age that person to join in on a group tour or make an appointment to come back at a later date. If another prospect needs an apartment size that you do not have available, you can phone a sister community and then direct that individual to one of your colleagues who can offer immediate assistance.

If you do find yourself on a tour with two or more parties, you must be courteous and give each person or group “equal time,” even if one seems more interested or more desirable as a prospective resident.

Think of yourself as the “host” of a party: Your goal is to make sure each one of your guests feels welcome and special so they will want to come back; or in this case rent. Oh, and one last thing: Remember to introduce your “guests” to each other. - This shows that you have good manners!

If you have a question or concern that you would like to see addressed next month or if you would like to inquire about leasing training, please ASK THE SECRET SHOPPER by mak-ing contact via e-mail or fax. Your questions, comments and suggestions

are ALWAYS welcome! Are you dealing with a unique chal-

lenge or an unusual situation at your community? The Secret Shopper would like to invite you to FAX or E-MAIL your questions, as well as any photos that might help illustrate your con-cerns. You will remain as anonymous as the Secret Shopper, but it will be fun to look for your question in print. Please let me hear from you soon, and then look for your questions in future editions of ASK THE SECRET SHOPPER. Provided by: Joyce Kirby, Shoptalk Service Evaluations.

Office: 425-424-8870. Fax: 425-415-1355. E-mail: Joyce @shoptalkservice.com. Web site: www.shoptalkservice.com.

ASK THE SECRET SHOPPER Provided by: SHOPTALK SERVICE

EVALUATIONSPhone: 425-424-8870

Fax: 425-415-1355E-mail: [email protected]

Copyright © Shoptalk Service Evaluations

2 The Landlord Times - Colorado • April 2011

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The Landlord Times - Colorado • April 2011 3

Fundamental ...continued from front page

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(303) 425-0248www.greenmountainlawncare.com

7140 Ivy Street, Unit B • Commerce City, CO 80022

Since 1985Wade Grove, Owner/General Manager

• Aeration• Lawn Fertilizing• Weed and Insect Control

• Shrub and Tree Care• Tree Deep Root Fertilization• Turfgrass Diseases

RESIDENT SELECTION – MORE THAN MEETS THE EYEINVESTOR POLICIES and maintaining GOOD LOANS

Applicant screening today is a laby-rinth of requirements and potential lia-bilities. What reports will provide a clear and comprehensive picture of the applicant? How should the reports be interpreted? How should the conversa-tion with the applicant be conducted? What can you do with the background reports? What is the proper procedure for accepting or rejecting the applicant? The wrong answer to any one of these questions can destroy investment objec-tives, the ability to repay on schedule and credit-worthiness.

Relevant laws require recognition of and proper dealing with protected classes of applicants. Equally as critical is the truly consistent application of rental policies and protection of sensi-tive applicant data. At any step along the way, improperly dealing with the issues raised will lead to liabilities under Fair Credit Reporting Acts, Fair Housing Laws and regulations imple-menting the US Patriot Act. Penalties for violation of requirements or an unintended misstep are substantial. For instance, inadvertently dealing with any individual or entity or any person acting on their behalf who appears on the US Treasury’s Specially Designated Nationals List can lead to having com-pany assets frozen and up to $1,000,000 in fines. Individuals can be fined up to

$500,000 and face up to twenty years’ imprisonment for violations.

Basic Steps to Smart Screen-ing of ApplicantsSeek Assistance

Borrowers functioning as landlords and management companies should seek the assistance of an experienced applicant screening company. While the Internet offers access to background screening data from numerous sites, investors and management profession-als cannot meet required standards by only ordering reports successfully. The screening company selected must have a reputation of providing rock-solid data – data that is comprehensive, detailed and timely and an industry expertise of long standing. Use of Inter-net startup companies or those that lack industry expertise can be costly.

When screening to fill a vacancy, or a prospective one, take the requisite time. The essential bits of information needed are the applicant’s rental, employment and credit history, refer-ences, and, perhaps, a criminal back-ground check. Landlords and management professionals should not hesitate to reject an applicant if he does not meet minimum standards. More is lost in the long run by taking a margin-ally qualified applicant who may turn into a problem. Losses will not stop with non-payment of rent. Damage to the investment’s reputation, loss of cur-rent good tenants and physical destruc-

tion of the premises have a negative impact on sustained cash flow.

Set policies and acceptance criteria in advance.

When screening applicants, policies and standards must relate to tenant quality and stability and the type of rental arrangements to be made. These policies and standards should be a real-istic minimum that you are willing to accept in a long-term tenant. They must be written and distributed to all appli-cants. Tenant selection policies should not be shortchanged by habit, conven-tional understanding or bravado. Seek capable assistance.

National Tenant Network, Inc.Started in 1980, NTN is the nation’s

oldest, national resident screening com-pany. Today NTN serves subscribers nation-wide from 30 regional offices. Every member of our team is focused on a single goal: to help property owners and managers make the best leasing decisions possible— time after time and without fail. We work in partnership with our subscribers to pre-vent risk and protect assets.

Edward F. Byczynski, CEO1.800.228.09891.800.340.1116

[email protected]

Author Profile: http://www.linkedin.com/pub/edward-byczynski/8/636/46

Serving the Denver Metro

Multifamily Housing Industry

More than 7,000 Distributed Monthly


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lease obligations. A MAR Index value of 100 indicates that market conditions are equal to the national mean for the index's base period of 2004. A MAR Index value greater than 100 indicates market conditions with reduced average risk of default relative to the index's base period mean. A value less than 100 indicates market conditions with increased average risk of default relative to the index's base period mean.

The screening model was devel-oped from historical resident lease performance data to specifically

evaluate the potential risk of a resi-dent’s future lease performance. The model generates scores for each applicant indicating the relative risk of the applicant not fulfilling lease obligations.

Data is also available at the prop-erty and sub-market level with our analytics tools. For more informa-tion, visit saferent.com.

CoreLogic, SafeRent and Registry ScorePLUS are registered trademarks of CoreLogic.


Colorado's ...continued from front page


With identity theft and data breach-es becoming more commonplace in today’s high-tech world, information security is an increasingly important responsibility for businesses.

As a large data provider to the multifamily industry, RentGrow is in-tune with regulations surround-ing data security and would like to offer some helpful tips to ensure that your business is doing what it can to maintain a secure environment, and comply with the Fair Credit Report-ing Act (FCRA) and the Fair and Ac-curate Credit Transactions (FACT) Act.

The FACT Act of 2003 provides guidelines for storage and disposal of consumer information such as credit reports. It is important that property management companies, in conjunction with their legal counsel, determine data security best prac-tices that are in compliance with the FACT Act.

5 Tips for Leasing Office Data Security

Review the following tips to learn about best practices for data security and to ensure that you have systems

in place to protect your applicants’ privacy.

1. Maximize Desktop SecurityLimit electronic access to private

applicant information to only those employees who need information to fulfill their job requirements. It is recommended to protect computer access for each authorized employee with a unique password of appro-priate strength and complexity (not “123456” or “password1”). Intelli-gent passwords are crucial because simple and easy to guess passwords are still a common way for hackers to access sensitive information [1]. Update passwords every 90 days and set automatic logouts so that the computer will lock after a set time of inactivity. Be sure to document all employees with access and what sys-tems they have access to.

2. Raise Awareness of Laptop Security

Laptop security is a critical part of data security due diligence. Human error, such as lost or stolen laptops, is the largest single cause of data se-curity breaches and accounts for over

35% of reported incidents, according to the Identity Theft Resource Center of San Diego [2]. Aside from follow-ing electronic security protocol, it is wise to educate your staff about the risks of theft outside your secure of-fice environment. Make your em-ployees aware of responsible laptop transport and handling protocol to minimize risk.

3. Protocol for Staff ChangesIn the event of a staff change, it

is imperative for companies to have procedures in place to immediately terminate access to applicant data for former employees. In a massive security breach at a large data com-pany in 2005, one way thieves stole personal information was by using log-in names assigned to former em-ployees [3]. To protect against theft, assign an individual to be responsi-ble for terminating access. Upon re-view of documented checklists of all access granted to former employees, the responsible individual must im-mediately deactivate and terminate all access privileges, in all systems.

4. Securely Store Hard

Copies Although data storage is clearly

trending toward paperless, many companies still store applicant infor-mation as a hard copy. If so, be sure to store these paper files securely. Lock all file cabinets and offices stor-ing private applicant data to protect against internal or external theft. Document and restrict access to these storage spaces to employees with permissible purpose.

5. Properly Dispose of Unnec-essary Electronic Files and Documents

Businesses must strike a balance between legal requirements for stor-ing data and data security due dili-gence regarding disposal of sensitive applicant information.

Once storage requirements are met, it is best to immediately destroy all unneeded documents contain-ing personal information to a point where the information cannot be re-constructed or reused in any way.Conclusion

Today, it’s more important than ever to make sure your business complies

Protect Your Business and Your Applicants: 5 Tips for Leasing Office Data Security

Georgina Bockel, Sales Consultant at RentGrow, Inc.

Continued on page 7

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DRURY BROTHERS GOES HERE

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ouble your personal produc-tivity in 30 days? Is it possi-

ble? Absolutely! This article will pro-vide three important steps for mak-ing the best investment you have ever made…an investment in you! Why is this critical? Because a small investment made today will yield huge dividends for you in the future. As a business coach, increased pro-ductivity is a popular topic with most of my property management clients. Why? Because finding a way to leverage small shortcuts, which generate large results, continues to be an important theme in the fast-paced world we experience today and the pace we can anticipate in the future.

Using a recorder:Begin by purchasing a small digi-

tal voice organizer which sell for $25-$100. These recorders are small enough to fit in your pocket, brief-case or purse and because of their size they become a convenient pen-less notebook. Recorders are perfect for taking voice-notes while you are walking/inspecting your properties and these notes can be used to devel-op a checklist for your next team/

maintenance meeting. Recorders are especially useful for dictating a com-pany letter or memo as you can rap-idly speak your ideas into the record-er and have a support person or your assistant actually do the typing for you, thus giving you the time to handle other more important tasks.

Tip From The Coach:Your mind is a powerful tool but

frequently it works in overdrive cre-ating new ideas or solving problems, which distract you from fully con-centrating on the task or person in front of you. Use your recorder to dump all your thoughts/ideas and then return to the task or project you are working on with a clear head. Start by capturing a steady-stream of your powerful ideas on a recorder, and watch to see how many of these turn into great ideas! On a personal note, recorders are great for making grocery lists, for building a list of errands, or storing the notes from a cellular telephone call you have just completed.

Learning to speed-read:On a daily basis you are bom-

barded with thousands of words/images/text messages and E-mails and it can be overwhelming just try-ing to keep up. Yet keeping up becomes more and more challenging with the pace of technology and the increased performance expectations in the property management profes-sion. The solution…take a speed-reading course and learn how to tri-ple your reading velocity and improve your learning comprehen-sion, at the same time. Organizations, such as Evelyn Wood, offer one-day seminars for $149 and will teach you how to become a more powerful reader and give you a step-by-step plan for increasing the comprehen-sion of what you read and see.

Tip From The Coach:Once you have learned to speed-

read, you will no longer experience information-overload because you will be able to grasp concepts and learn new ideas at a more joyful and fun pace. On a personal note, learn-ing to speed-read will help you become a daily-learner which will be critical to your continued success in the property management profes-

sion. Those who understand this important concept will be the future leaders in this industry. So…become a speed-reader and learn at least one new idea every day because one year from today, you will own a treasury of 365 new ideas!

Developing a database:A database manager is powerful

software that stores important infor-mation and can be quickly installed on your desktop computer, your lap-top computer and in many palm-size organizers. Plus, the information in your database can quickly be moved from one computer to the next so your database is always accurate and current. A database can easily store a person’s name, phone number, address, his/her type of business, and will even remind you when a variety of projects/tasks are due. The real power in having a database is being able to access a vendor, a supplier, a prospect or an industry expert in just seconds. Plus, you will be able to sort your database and print an endless variety of reports, telephone numbers, mailing labels

Double Your Property Management Productivity…In 30 Days! ©

Dby Ernest F. Oriente, The Coach

Continued on page 7

he U.S. Department of Housing and Urban Development

(HUD) and the U.S. Department of the Treasury recently released the March edition of the Obama Administration's Housing Scorecard. Officials caution that the latest hous-ing figures underscore fragility in the housing market and the need to continue efforts to help American families stay in their homes. The housing scorecard is a comprehen-sive report on the nation’s housing market.

"There’s no question that this month’s figures show a troubling dip in home sales and housing pric-es," said HUD Assistant Secretary Raphael Bostic. "While we should not ignore the real impact that the Obama Administration’s programs are having for millions of homeown-ers and borrowers, these statistics clearly show that housing markets across the country continue to strug-gle to regain stable footing. We must remain steadfast in our efforts to support homeowners and communi-ties in ways to help advance market stabilization and a transition towards health."

"The latest data underscore the importance of continuing our efforts to help families stay in their homes,"said acting Assistant Secretary for Financial Stability Tim Massad. "Each month, the Administration's Home Affordable Modification Program helps over 25,000 additional families avoid fore-closure, and it has set important standards that have led to more than 2 million mortgage modifications outside of the program. We are also working hard to implement addi-tional programs to assist families in the hardest-hit states. We will con-tinue these efforts so that we help more Americans remain in their homes and help our nation recover from this crisis."

Available online at www.hud.gov/scorecard, the March Housing Scorecard features key data on the health of the housing market includ-ing:

• Housing market remains fragile as data through February paint a mixed picture of recovery. Home prices remain weak under contin-ued strain from foreclosures and

distressed home sales, according to CoreLogic data now available in the Housing Scorecard. Mortgage delinquencies contin-ued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.

• Administration efforts have helped millions of families deal with the effects of the deepest economic crisis since the Great Depression. Since April of 2009, record low mortgage rates have helped nearly 10 million home-owners to refinance, resulting in $18.1 billion in total borrower sav-ings. More than 4.4 million modifi-cation arrangements were started between April 2009 and the end of February 2011 - including more than 1.5 million HAMP trial modi-fication starts, more than 776,000 FHA loss mitigation and early delinquency interventions, and nearly 2.2 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agree-ments offered was more than dou-

ble the number of foreclosure com-pletions for the same period (1.9 million). View the February HAMP Servicer Performance Report.Given the current fragility and

recognizing that recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.

Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration's unprecedented housing recovery efforts, including assistance to hom-eowners through the FHA and HAMP. The Obama Administration’s complete Housing Scorecard is avail-able at: www.hud.gov/scorecard

HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing mar-ket to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable com-munities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.


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Protect ...continued from page 4

Double ...continued from page 5

and resident/prospect lists, which will increase your daily closing ratio and resident retention. Tip From The Coach:

For database software consider purchasing ACT, Goldmine, Telemagic, Maximizer, Sharkware or Salesforce.com. Most database pro-grams perform similar functions so ask those in your property manage-ment company which software they use and ask them to show you how they use it. On a personal note, a database is great for birthday remind-ers, for printing labels when mailing holiday cards or for planning a fam-ily reunion.

Want to hear more about this important topic or ask some addi-

tional questions? Send an E-mail to [email protected] and The Coach will E-mail back to you a free invitation to be a participant on a PowerHour conference call.

Author's note: Ernest F. Oriente, a business coach since 1995 [26,960 hours], a property management industry professional since 1988--the author of SmartMatch Alliances--and the founder of PowerHour...[ www.powerhour.com and www.powerhourseo.com ], has a passion for coaching his clients on execu-tive leadership, hiring and motivating property management SuperStars, tradi-tional and Internet SEO/SEM market-ing, competitive sales strategies, and high leverage alliances for property man-

agement teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national real estate and apartment building insurance [ www.powerhour.com/propertymanage-ment/apartmentbuildinginsurance.html ], SEO/SEM web strategies, national WiFi solutions [ www.powerhour.com/propertymanagement/apartmentwire-less.html ], and powerful tools for hiring property management SuperStars and building dynamic teams. Ernest worked for Motorola, Primedia and is certified in the Xerox sales methodologies. Recent interviews and articles have appeared more than 6500 times in business and trade publications and in a wide variety

of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 181 articles for the property management industry and created 350+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail [email protected] or visit their website: www.powerhour.com

with the FACT Act to successfully de-fend against litigation from applicants, a damaged reputation, and associated fi-nancial penalties. Be sure your company is complying with data security regula-tions and conducting due diligence for the good of your clients, your business and the public.

This article is meant to provide educa-tion and information on this topic, and should not be construed as official legal advice. All property management com-panies should consult with their legal counsel regarding their organization’s

data security policies. Georgina Bockel is the local sales con-

sultant of RentGrow, Inc., the resident screening experts (www.rentgrow.com). She can be reached at [email protected] or call (800)736-8476.

Citations:[1] Vance, A. (2010, January 20). If

Your Password Is 123456, Just Make It HackMe, The New York Times. http://www.nytimes.com/2010/01/21/technology/21password.html

[2] Krebs, B. (2009, January 6). Data

Breaches Up Almost 50 Percent, Affect-ing Records of 35.7 Million People, The Washington Post.

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/05/AR2009010503046.html

[3] Timmons, H. (2005, April 13). Security Breach at LexisNexis Now Appears Larger, The New York Times. http://www.nytimes.com/2005/04/13/technology/13theft.html

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Absorption: 825 UnitsAlthough vacancy was unchanged

for stabilized properties this quarter, positive absorption of 825 units was achieved by new properties in lease-up. The annual total gain of 5,744 occu-pied units, although lower than last quarter, is still well above the long-term average for the metro area. Rents: $890 per unit $1.03 per sq. ft.

Metropolitan Denver’s average gross rent for stabilized properties reached another all time high, increas-ing $7 this quarter to $890, or $1.04 per square foot. This is $39 or 4.6% higher than a year ago, and represents the

highest annual growth rate in the 27 quarters we have been surveying this market.

Areas:

The CBD was the top performer this quarter, up an impressive $59, or 4.5%. Annual increases were the highest in CAP, up 11.0%, the Central Business District (CBD), up 10.8%, and the Denver Tech Center (DTC), up 8.4%.Concessions:

The average concession of 4.7%, or $42, is the lowest since the last market peak in the third quarter of 2008. Net or effective rents have increased 8.4% during the last four quarters.

Sales (arms length): $117,256 per Unit$119.85 per Sq. Ft.

After a record low number of sales during 2009, sales volume during 2010 returned to normal historical levels (pre-2005). The sales this quarter com-bined with the activity seen on current listings indicate that 2011 should achieve similar or better sales volume than 2010. The sales this quarter had an average price of $117,256 per unit, or $119.85 per square foot. Parc Belmar, at $69,740,000, was the highest priced sale since late 2007. Grand Peaks pur-chased the 512-unit asset, built in two phases from 1987 to 1993, for $135,684 per unit, or $125.97 per square foot.

New Construction:Five new properties either broke

ground, or were on the verge of start-ing construction as this went to press, with a total of 771 units. In the CBD, the second phase of The Manhattan with 134 units started construction, and 2020 Lawrence with 231 units will start any day. Apartments at Observatory Park near DU closed on its construction loan, and is vacating the existing buildings before demoli-tion begins. Two tax credit properties on the east and west sides of the metro area are underway. The bulk of these units will not be completed until 2013, although one small tax credit property

could complete 92 units this year. Based on the current pipeline, we

project completion of 1,700 units dur-ing 2011 and from 2,000 to 3,000 units during 2012.

Observations:All ages of properties are increasing

rents at a rapid rate, with properties built during the 1990s and 2000s now exceeding their 2008 highs. Peak rent levels should also be achieved by older properties in the next couple of quar-ters.

Rents are increasing at an accelerat-ing pace, with the trailing 12-month growth rate being the highest since our survey began. With low levels of new construction in the pipeline, continued strong rent growth is expected for the remainder of this year and into 2012. Based on recent absorption rates, vacancy is expected to drop below 5% by the third quarter of this year.

Apartment Insights is a web based infor-mation and analysis tool used by apart-ment owners, management companies, and lenders. For a demonstration or sub-scription, please call: Apartment Insights, Cary Bruteig, MAI, CRE, 900 E. Louisiana Ave., Suite 110, Denver, CO 80210. Phone: (303) 722-4222. Fax: (303) 744-3759. ApartmentInsights.com.

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