What are renters willing to pay extra for?

Research shows that renters are often willing to pay a little bit more for extra amenities and upgrades. Multi-Family Executive’s Concept Community surveyed more than 84,000 renters nationwide to determine their wants and needs and what they were willing to pay extra for. One big question was Carpet or Hardwood? Another was parking? Will renters pay extra for a designated parking space?

As it turns out, there are some pretty clear trends, and age is the greatest predictor of what renters value and will pay for. When asked if they would pay extra for hardwood over carpet throughout all of their living spaces, the overwhelming result is that the younger the renter, the more inclined they are to say “Yes!”  Roughly 50% of Millennials and Gen Xer’s would pay $75-100 more every month for hardwood, whereas only 40% of Baby Boomers and 26% of the Silent Generation are willing to do so.

OK, so they want it and are willing to pay a little extra for it, but does it make sense? It may when you consider the average Millennial rents for 6 years prior to purchasing their first home, and despite the fact that mortgage rates are at an all time low, property values and home prices have increased at a rate that exceeds affordability for most.

It’s the age-old question of cost versus value. In virtually every case, the initial cost of installing hardwood over carpet is higher. However, over time it generally proves to have greater value given how long it lasts with proper maintenance.

If initial cost is the only issue considered, carpet is the clear choice over hardwood. However, when factoring in increased rental income, the choice is not quite as clear. Adding $75-100/month of additional rental income can make up the difference in as few as one to two years.

What about parking? 67% of renters own one car. 21% own two. And 9% don’t own a car at all. Concept Community posed the question of whether or not they would be willing to pay additional rent for a designated parking spot or a dedicated spot in a carport with roof cover? Of the 84,000 renters polled, 60% said they would pay for a designated parking spot. But who would pay, for what and how much?

A specific amount was set for different types of spots. $25 for a dedicated parking space and $75 for a dedicated spot in a carport. As it turns out, there is a generational trend to paying for parking in a multi-family and apartment communities. Despite the fact that rental rates are continuing to increase, every generation was willing to pay $25 for a dedicated space over a free one. However, the older the driver, the more willing they are to pay for a space to call their own rather than search for parking daily.

To no surprise, there was far less enthusiasm for paying $75 for a space in a carport. Gen X-ers were most willing to do so, followed closely by Baby Boomers and Millennials. The Silent Generation weren’t so much. These results make sense whenconsidering 28% of Gen X-ers and 26% of Baby Boomers said they owned two cars, versus 17% of Millennials and only 15% of members of the Silent Generation.

So, does it make sense to consider charging additional rent for designated parking in your community? It probably doesn’t make sense to make it mandatory. However, if there are some renters who clearly want it and are willing to pay for it, perhaps offer it as an optional amenity at an additional cost to the standard rental rate?

If you’re interested in the full results of the Concept Community survey, The Next-Gen Apartment: What Renters Want,  it will be presented at the Multifamily Executive Conference in September.

Is there a housing plateau coming for metro-Denver?

It’s news to no one that the Denver Real Estate market is at an all time high. It’s on fire right now and doesn’t show signs of slowing down any time soon. Or does it?

According to the Denver Metro Association of Realtors market trends report, in June, for the entire residential market of single-family homes and condos, there was an 8% increase, $25,600, in the median home price over last year. In the last month alone, median sold home prices increased 1.39% from the previous month.   Inventory is up with active listings 24.4% higher than last month and 9.67% over last year at the same time, with sellers trying to capitalize on rising prices and low interest rates.  We’ve seen annual appreciation gains in the double digits for 3 years in a row, with single-family home and condo prices up an average of 10.74% and 12.38% respectively for average sold prices. Across the board, total sales volume is $10.17 billion year to date (up 7.21% compared to 2015).

However, some analysts are claiming that we will soon begin to see signs of a much needed market correction and are predicting a plateau in the near future, even as early as 2017. Mark Boud, chief economist at Real Estate Economics based in Orange County, Ca., predicts the 3 year run in double digit appreciation in metro-Denver home prices will begin to fall off in the second half of this year. He predicts meager price increases and then small decreases by the middle to end of 2016; 5.4% appreciation in metro-Denver median home prices this year and 2.8% in 2017 and 1.8% in 2018. He doesn’t predict a similar crash in the market to what we saw 2007-2009 when job losses drove a depressed market and a rise in foreclosures and distressed sales. Boud suggests that a leveling off or plateau will require a shift in our thinking that has grown accustomed to sharp increases in home prices and property values. Anthony Rael, the Chairman of the Denver Real Estate Market Trends Committee at the Denver Metro Association of Realtors, says, “if we get anything under 5 percent in appreciation, sellers will lose their mind and think the market is collapsing.”

So, why are experts predicting a shift? Why would home prices begin to level off and possibly even decline given recent trends and no clear indication or signs of slowing down? According to Real Estate Economics, the Denver market is shifting from one that has been under-valued and under-supplied to one that is over-valued but still undersupplied.  Home prices have finally reached the limits that metro-Denver income levels can support and new building and development will most likely not correct lack of supply.

This means that when interest rates increase from where they are currently in the mid-3’s, the lowest level in three years as the Federal Reserve reacts to Brexit (Source: Freddie Mac), to the mid-5’s, where they are predicted to reach in 2020, it will become more difficult to finance a home. Trends towards increased conservatism in mortgage lending and underwriting guidelines combined with the fact that builders have the strong memory of being badly burnt during the most recent housing crisis as well as being faced with more challenging obstacles to overcome with City and County development standards, indicates that the market may be even more vulnerable to a decrease in continued growth. Given these predictions, it seems wise to take the advice of Mark Boud and Anthony Rael. We collectively need to shift our thinking and expectation around continued sharp increases in metro-Denver home prices and prepare for a plateau on the horizon.  

Make your next Rehab, Remodel or Renovation a Huge Success!

Imagine this scenario; you’ve determined the scope of a large renovation project, chosen a contractor and are about to get started. Your number one goal is a smooth, stress-free process. But is that possible on large-scale apartment rehabilitation or new ground up construction projects? It’s not only possible, but guaranteed if the right steps are taken before you begin or break ground.

The essential key to making your renovation a huge success is the quality of communication with the contractor from start to finish. The way that information is shared with your contractor and with your residents is critical to a successful process and outcome.

According to Chris Tolar, President and CEO at Stonebridge Builders, there are a few critical communication requirements for a smooth rehab project, most importantly that the project is viewed by all stakeholders as a collaborative endeavor, not an US versus Them mentality. Additionally, before any construction begins, the client first needs to communicate the full scope of work to the contractor. There is a shared responsibility to confirm that the clients’ expectations are clearly understood by the contractor, and that agreements are set in place to create a system for accountability.

Tolar also emphasizes trust as a crucial component to a solid client/contractor relationship. The contractor should be hired and trusted to manage all pieces of the project – materials, construction, scheduling, permitting, etc.

For the most efficient exchange of information and decision-making regarding the project, the client should have one designated point of contact to deal with any and all rehab questions.

Diana Pittro, executive vice president of Chicago’s RMK Management Corp, leverages technology and communication tools early in the rehab process, and then employs them at every point along the way. She starts every project with an extensive spreadsheet she calls her “Bible.” This includes everything from scope of work, detailed lists of all necessary materials, projected install dates to marketing and resident communications plans, on-site storage and rotation scenarios, costs, and analysis tabs. This spreadsheet is created and updated long before residents get notice of the upcoming renovations. Residents are informed of what’s going to happen and when at 90, 60, and 30 days and then one week before any construction begins.

“If you do it right, your residents are the last to know, but they still find out well before you start any work,” Pittro says.

On inferior renovation projects and rehabs, communication is sub-standard and work often commences before very clear agreements are set in place regarding the specific course of action at every stage of the project.  When the client and contractor aren’t on the exact same page from the start, the project tends to extend beyond projected deadlines and budget, resources are poorly managed and residents are inconvenienced and frustrated, which ultimately affects lease renewal rates.

When considering improving your property with a rehab, renovation or remodel, partner with a contractor like Stonebridge Builders. Their commitment to the highest quality craftsmanship, exceptional service and consistent and thorough communication at every step of the way will ensure your project is a huge success

Welcome to Anne Bivens!

Stonebridge Builders is pleased to welcome Anne Bivens to our staff!  Anne is our new Construction Coordinator.  She works as a liasion between our finance department and construction managers.

Anne lives in Thornton with her husband Bud and dog Cal.  Together they love home improvement projects and volunteering through their church to help the less fortunate.  Anne's favorite charity is Cold Weather Care, a program that is a hand-up, not a handout, for people in Adams County who are temporarily homeless.

2015 Charity Auction benefiting Family Homestead

Stonebridge Hires New Director of Finance & HR

Please join Stonebridge Builders in welcoming Jen Kerrigan as our new Director of Finance and Human Resources.

Originally from Akron, Ohio, Jen is a graduate of The Ohio State University.  If she's not cheering on the Buckeyes, you can usually find her at a sporting event for one of her kids or hosting a book club.  She is also an active volunteer for Hope House of Arvada and Operation Christmas Child.  

Jen lives in Arvada with her husband and their four children and Spirit the dog.

Welcome Lance Miller!

Lance Miller has been named the Business Development Director at Stonebridge Builders.  His responsibilities including developing and maintaining relationships with key decision makers.  He will play an active role in developing Stonebridge's brand, relationships, and reputation as a leader in the multi-family construction industry.

Lance grew up in Goshen, Indiana and graduated from Ball State University with a degree in Business Administration.  He brings with him over 10 years of sales experience.

Chances are you will find him either on the golf course or on the ski slopes, depending on the season (unless Game of Thrones is on!).  

Annual Fall Camping Trip

The Stonebridge Builders team has officially survived its annual Fall Family Camping Adventure.  And the photos below show how much fun we had:

Business is Booming . . . What You Need to Know.

1) Denver is Hot!

No doubt if you are in the development industry in the Rocky Mountain region you are well aware of this fact. It is the main topic or at minimum the sub-headline of all industry events. Denver has garnered both domestic and international attention as the hot spot of the interior U.S. for capitol investment and development.

Check any top list (thriving economy, diversified economic market, gen Y hot spot, sustainable market, venture capital funded investment hot spot, 2nd Best place in the US to launch a start-up according to Forbes, healthy and fit communities, effective public education, etc.

Denver is the envy of almost any interior United States metropolitan community. So naturally investors and capital development has quickly followed these positive trends, creating the construction boom we are living and serving our clients in.

2) Emerging New Players

On both the development and investment side of the equation many new people are getting involved. Of course everyone wants the "best" working on their projects. However the labor market has not been flooded by the same vigor, in fact other factors, such as the need for labor in the emerging energy markets of North Dakota has pulled many away.

What does this mean? More people are demanding the supply of good labor and trades. Who are the trades choosing to work for in such a flush market? Their loyalties stay with those who they know, who will pay a fair price (within the hot market) and who have longevity and will survive when times are not as abundant. We are proud to maintain our strong trade relationships with those we have worked with for years.

3) You Get What You Pay For

Ah, yes. Quality and cost! 
Aren't these some of the most important factors that drive all business decisions?  Don't we wish they charted a parallel course to that of the proven trends of supply and demand (i.e the higher the quality (demand) the lower the cost (supply).

Even though this is what we all desire, the truth is, quality and cost DO NOT follow the trend of supply and demand. In fact your grandma's adage is more accurate; "You get what you pay for!"

These factors frequently consume conversations in our office. Stonebridge Builders is known for its quality. We characteristically find ourselves competitive with pricing, but exceed our customer's expectations with quality.

However, we still have clients that desire the supply and demand trend. Sometimes they pick a competitor that is cheaper, but pay for it in the long run with change orders. Or they pick the "yes" contractor that sounds good (i.e. is saying what we all want to hear) but in the end turns out to be a farce.

Stonebridge Builder's president Chris Tolar warns, "When clients treat cost and price as a top priority, they may very well be pursuing expensive, slow, and the wrong results. Just ask any friends who have hired the cheapest contractor for their project, how it went."

We as a firm actually believe there is another critical factor that matters the most and that's communication. When we can talk with our client and work together that is what creates a winning relationship for all. It is always why more than 90% of our business is referral based.

2014 AAMD Chili Cookoff

Miracle on Logan Street

"It's not what you call me, it's what I answer to." This eloquent African proverb embodies the true essence of empowerment.

Stonebridge Builders was extremely proud to be selected as the general contractor and partner with Mile High Behavioral Heathcare for this important community project. "A Miracle on Logan Street" is Mile High Behavioral Healthcare's newest housing initiative for single homeless women who are reclaiming their lives by participating in off-site substance use and/or mental health treatment. The house provides eight woman with their own living spaces, each with its own kitchenette and bathroom, as they continue their journey toward recovery, self-sufficiency and the empowered life.   Stonebridge Builders completed an extensive house renovation which included: remodeling nine individual apartment units, creating an additional ADA compliant suite, a new boiler, fixing all interior wall piping and plumbing, interior drywall repairs, exterior roof and gutter repairs and exterior painting.    Picture: Chris Tolar accepting a handmade quilt, at ribbon cutting ceremony, as a token of appreciation for Stonebridge Builders' contribution and work.

Welcome Eric Hall!

Stonebridge Builders is pleased to welcome our new Estimator, Eric Hall!

Originally from Arvada, Eric graduated with a degree in architecture from Arizona State University before returning back to Arvada.  

A father of 3 girls (daughter Terra and 2 dogs Allie & Macy), Eric enjoys camping, hiking, fly fishing, and hunting.  

2014 AAMD Trade Show

Rousing News for Denver’s Multifamily Industry in 2014!

Based on a recent broadcast from MFE Multifamily Executive Apartment Trends

The Top 10 Rent Growth Markets for 2014:

1. Seattle: 5.8

2. San Francico: 4.7

3. Denver: 4.6

4. San Jose: 4.5

5. Nashville: 4

6. San Diego: 4

7. Austin: 3.9

8. Dallas: 3.9

9. Houston: 3.9

10. New York City: 3.8

To read entire article- copy/paste follow link into your browser:

http://www.multifamilyexecutive.com/rent-trends/top-10-rent-growth-markets-of-2014_o.aspx?dfpzone=search

Stonebridge wins award!

Our team had a fantastic time steering the grocery cart up and down the aisles as fast as possible, dressed to a "T" as duck hunters from the entertaining Duck Dynasty series for the Comitis Crisis Center. The Annual Grocery Cart Races for Comitis Crisis Center always corroborates a basket of fun. Our team not only raised $1300 to donate to the center but our costumes out ranked the bunch earning the Best Team Costume Award! Everybody at Stonebridge Builders is always excited to live out our core value "service" in the community. We gratefully acknowledge the contributions to this charity from Stonebridge Builders and team, Sandy Mancinelli with Colorado Carpet Distributers, Seth Haley with Western Pacific, Derek Becker, owner of Wireworks Electric and Scott Slankard representing Water Systems.

Keeping Up with Color

Whether it’s the leaves on the trees or the latest fashion, color is always changing. In fall, the leaves are changing colors and the climate becomes blustery. This results in the finest of entertaining shifting from the backyard ball game or a BBQ on the deck to the coziness of the kitchen, family room or media room to take in a big game of football.

Often, the seasons change inspires us to update our home as well. Changes can be uncomplicated and minimal to refresh a room. Obliviously, major changes are exciting.  A remodeled kitchen or the basement finish of your dreams may be in the budget and can be done just in time for your entertaining events. Changing seasons is the perfect time to remember color for the walls. Because walls take up over half of the space in a room, wall color is essential to achieving the right look. Brighter colors create a more stimulating and playful environment, while pale and neutral tones evoke a sense of relaxation. You may want to set a certain mood. Design details and color choices will allow you to do so. Engaging a contractor can help you get the best design ideas and the remodel can be completed with minimal stress and anxiety.

Life of Luxury in Apartment Living!

Apartment living can be much like staying at a resort. With busy schedules, long commutes to work, and the ability to enjoy the amenities found on most vacations, coming home to a luxury apartment can be such a delight! Stonebridge Builders has helped to spear head the growing trend of apartment living through remodeling and renovating several apartment communities in the Denver area. 

This article hits the nail on head with the Luxury of Apartment Living.

Live in Luxury, Elegance by Tyree Leisch

Apartment living can be acquired taste. At first the people who have lived in sprawling independent houses with garden and compound cannot imagine the life in an apartment. With the land prices shooting up out of reach even in tier 2 cities, the apartment living is necessity. However, there are so many advantages which they understand and enjoy only after moving into an apartment.

The independent house was a peaceful living once upon a time but, now, with smaller sites and no garden houses, it is a nightmare when the traffic increases and children have to play on the street. The apartments have so many amenities like garden, swimming pool, running tracks, children play area etc., that in cities it is the only way to live.

Another major advantage is maintenance. The apartment management charges certain amount for maintenance but, the backup power, water, external maintenance and security are taken care. It is a worry free living compared to independent house where everything needs to be taken care of by the owner.

Most of the apartment complexes have tenant association. In most cases, the maintenance will be done through it and it will be a democratic organization where tenants take turn to be the management team and most of the major decisions are taken by vote. In fact the tenant associations have several rights given by the government as well as responsibilities. In some cases, in order to make the city green, the wet waste or organic waste needs to be composted instead of the city municipality picking up the waste to be thrown in dump yard.

Schools and colleges have buses pickup children from the apartment complex and dropped off in the complex which more secure than dropping them on the road. The parking also is a great advantage compared to parking on the street in an independent house.

2013 AAMD Maintenance Olympics

Thank you for visiting us at this year's Apartment Association's Maintenance Olympics.  A good time was had by all and we were able to meet with many of you in person.  We look forward to seeing more of you during the May 2013 AAMD Trade Show.

Good news for Denver Multifamily Clients: Denver Area Apartment Market Sets Records in 2012

Great news for our Denver multifamily clients is reported by Dennis Huspeni, Denver Business Journal:

 "The Denver-area apartment sales market was one of the nation's hottest in 2012, with a record $2.4B worth of apartment buildings sold.  Low interest rates on construction, purchase and development loans, as well as higher demand from renters helped fuel the push.  That's according to ARA Colorado, one fo the highest-volume multifamily brokerages here.  ARA brokers alone moved $1.1 billion worth of apartment assets in 62 sales representing 10,429 apartments."

Huspeni further writes "vacancy rates for Denver-area apartment buildings dwindled to 4.3 percent through the third quarter, according to the Colorado Division of Housing.  Average rents climbed almost 6 percent in that same period.  And interest rates have dropped to as low as 3 percent fixed, easing financing for apartment-building buys."

See the following link for the full article:

http://www.bizjournals.com/denver/print-edition/2013/01/04/apartment-market-sets-records-in-2012.html?page=all

Stonebridge to Complete SBA E200 Initiative

Chris Tolar, President of Stonebridge Builders, will be graduating from the SBA's e200 Initiative on October 23, 2012.  The Emerging Leaders (e200) Initiative is a federal training initiative that specifically focuses on executives of established businesses, currently poised for growth, from communities across the country and provides them the organizational framework, resource network, and motivation required to build a sustainable business of size and scale.

Chris states: "For the past 7 months, I have been attending the e200 business 'bootcamp', in an effort to develop and refine the strategic direction of Stonebridge Builders.  The best part of the program was getting the chance to network with other Denver metro business owners, and learning about their businesses.  I have met folks ranging from microbrewery to insurance to security business owners, and we all share common challenges.  This has been an incredible journey."

The graduation ceremony will be held on Tuesday, October 23, 2012 at 6pm at the Aurora Civic Center.  The Aurora Mayor and City Council will be present.

For more information on the program, please visit the following link:

http://www.sba.gov/content/sba-emerging-200-initiative-0