What Silver Lining?

by Osman Parvez

For the last few months, I've noticed an uptick in the number and size of commercial property deals in our region. Interlocken is again hot. Longmont is attracting a number of new companies. Denver is frequently announcing new projects underway and large commercial property deals. A quick glance in downtown Boulder now yields a surprising number of cranes (and more are on the way).

As I've mentioned before, rising interest rates and tougher lending standards (including a move against piggyback mortgages) are all signs of credit tightening, which should push potential buyers into renting. Sure enough, residential rents are on the rise. Gordon Von Stroh, a DU business professor who has been tracking Denver's real estate market for 25 years just released his latest (100th) report. It shows apartment vacancies in Denver at the lowest level since 2001 and median rent of $804.28 (up 2.3% from a year earlier).

If you look at my real estate market updates (right menu on my blog) for local communities, you'll find many are showing higher inventories and lower absorption rates. Colorado also has a record number of foreclosures. Areas with short commutes to Boulder or Denver may be attractive investments (I particularly like Broomfield, Louisville, and Lafayette). The smart money earns a profit by buying property below intrinsic value. Distressed assets are often a great source for doing this, if you're willing to do the due diligence and have patience for the often lengthy process.

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Please Note

This document contains forward-looking statements. You are strongly cautioned that investment results are subject to business, economic and other uncertainties. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time. Always consult your financial advisor before making an investment decision.