In the Midst of a Boom, Existing Properties Need to Compete with New Construction

Denver is in the midst of a boom in the multifamily market. Over 80 new projects were completed in the last 5 years, and with 25,000 units under construction this year and 3,246 new apartments delivered in the first quarter, existing projects need to step it up to compete.

Average rents for apartments built since 2010 are 60% higher than rents for apartments built in the 1970’s. Compare $1729 versus $1079 respectively and it’s clear that outdated multifamily properties need to renovate, remodel and add amenities in order to take advantage of rising rental rates. 

Chris Tolar, President of Stonebridge Builders, a Denver-based commercial construction company specializing in apartment renovations says, “The bulk of our business is in multi-unit apartment rehabs. Regardless of location, property owners are feeling the pressure to upgrade and update individual units given the current market conditions. The increase in inventory of brand new units is creating a pressure to keep up and compete. “

Stonebridge Builders Business Development Director, Lance Miller, confirms that complete unit renovations and clubhouse remodels consist of the bulk of their contracts for properties with larger renovation budgets. However, for apartment communities with tighter budgets, upgrading existing common areas and clubhouses and adding amenities like BBQs, dog runs, dog washes and especially package rooms, allows them to compete with new construction.

Construction of a package room can be a big upgrade at a relatively low price point compared to other renovations. Package rooms provide a much desired, convenient service for residents. Safe, 24-7 access to package retrieval is an amenity most residents are willing to pay extra for, and can be a deciding factor when choosing a community.

Tolar says, “Since Amazon has come on the scene, with most people doing the bulk of their shopping online these days, it can be a major burden for the on-site staff to constantly have to pull packages for residents. As a solution, we convert space inside of a clubhouse or common area into a self-service package retrieval facility. For communities that just don’t have inside space to convert, outdoor/weatherproof lockers are also available. Also, we can, and have built additions to house a new package room when space is limited.”

Whether you’re considering a complete overhaul of your multifamily property, a new clubhouse or looking to add or upgrade specific amenities, call Stonebridge Builders, the industry expert in Rehabs and construction.

The Benefit of Unit-by-Unit Renovations vs. Major Overhauls of Apartment Complexes and Multifamily Communities

Regardless of the size of the property, whether it is luxury or affordable, urban or rural, property owners are concerned about the same things, property value and profitability. Maximizing rental income and keeping expenses low are the top priorities. When the Net Operating Income (NOI = Income minus Expenses) on a Multi-Family property increases, so does the overall property value.

Metro Denver has one of the most competitive rental markets in the country. Demand is high and supply is low. Last year inventory added by new construction was absorbed without increasing vacancy rates, in fact, vacancy rates decreased by over 1%. At the same time, apartment rents grew by 2.9%, which is slightly faster than the overall inflation rate.

To keep up with the competition and capitalize on current market opportunities, property owners need to justify rent bumps while keeping expenses and vacancy rates low. Individual unit renovations and rehabilitation of the property are the main factors in generating and justifying rent increases.

For most property owners, a complete rehab of the entire property is cost prohibitive and not feasible. However, opting for unit-by-unit renovations as apartments become vacant softens the financial burden of a complete overhaul while keeping occupancy and rental income stable.

Stonebridge Builders, a Colorado-owned and operated commercial construction company, has perfected unit-by-unit apartment rehabilitation and has made this a top priority in their business model. For all projects, the scope of work and timeframe for completion is determined by allocated budgets and projected lease turnover.

Stonebridge understands local market conditions and works diligently with property owners to ensure that unit availability and quick turnaround are maximized while costs and income loss remain low. Currently, on a larger scale, Stonebridge is renovating 600 units over a 2-year period for a large multifamily community in Superior, CO and completing 55 units over 12 months for a smaller Denver metro apartment complex. When Stonebridge recently completed turn key renovations for an apartment complex in Littleton, each unit was completed in 10 days or less, maximizing unit availability and minimizing rent loss.

Successful unit-by-unit apartment renovations and value-add projects require planning, preparation and careful oversight and management of the project. When tenant occupancy is high, exterior improvements like new siding, stamped concrete, designer patio finishes, parking lot re-paving and landscaping can supplement a lower volume of interior renovations of kitchens, baths, plumbing and lighting, new paint and flooring.  

To create a strategic plan and partnership to renovate an Apartment Complex or Multi-Family Community, call us. 20 years of experience in the industry, a portfolio of successful outcomes and our commitment to providing the absolute best customer service will ensure an outstanding experience from start to finish.

Stonebridge's Work is Nominated in 2011 Tributes Awards

Stonebridge Builders is pleased to announce that its work has been included in the finalists for November 2011's Tribute Awards.  The "Tributes" awards are held every three years, and coordinated by the Apartment Association of Metro Denver.  There are various categories of award, and Stonebridge Builders is proud that its work has been included as finalists in the following categories:

1. Bluffs at Highlands Ranch - Most Outstanding Renovated Community

2. Fairways at Raccoon Creek - Most Outstanding Renovated Community

3. Bella Terra - Most Captivating Clubhouse

4. Hearthstone - Most Captivating Clubhouse

5. Horizons at Rock Creek - Most Captivating Clubhouse

We are excited to see the results of this year's ceremony, and are proud for our work to be included amongst these impressive nominated communities.