Average Rent In Q2 Declines To Just $1,506 Per Month; Nearly Every Age, Size Of Apartments Saw Drop In Rent Prices
by Glen Richardson
For the first time in more than a decade average rents in Denver fell in the second quarter of 2020. The last time average rents dropped year over year was in the first quarter of 2010, according to the Apartment Association of Metro Denver.
Blockbuster Buildup: The Bromwell, an apartment complex along the Speer Blvd. corridor, is among the apartments that are just opening. It adds another 171 homes onto city’s constant apartment buildup.
The coronavirus economy combined with new apartments coming on the market burst Denver’s decade-long rent bubble. New construction added 1,170 units in the second quarter, including 936 in the metro area alone. Released July 21, the rent data was conducted for the Apartment Association by DU’s Daniel School of Business and Colorado Economic Management Associates.
Compared to Second Quarter 2019, average rents dropped to $1,506 per month, a $30 monthly decrease or a $360 annual decline. Taking an optimistic point of view, Mark Williams, Executive Vice President of the Apartment Association, says that is good news for future renters. “Not only are rents not climbing, they went down for all but one floorplan type. There were decreases in all categories, except for two-bedroom, one-bathroom units. This is likely because a renter who had an extra bedroom has added a friend to his or her lease.”
Metro Wide Drop
The decrease in rent was consistent across most geographic areas or 24 of 36 submarkets. Nearly every age and size of apartments saw declines in rental prices.
Enormous Pull: With 14-stories and 142 homes, The Pullman Apartments on Wewatta St. in the Union Station neighborhood is among new apartments that have opened in Denver. New construction added 1,170 units in the Second Quarter helping to burst city’s decade-long rent bubble.
Newer properties saw the steepest drop in rental rates. Apartment complexes built in 2010 or later have average rents of $1,840, a $105 drop from the previous quarter.
Properties built in the 1970s remain the least
expensive to rent, averaging 20% less than the average rental cost for all apartments.
Virus Specific Data
The Second Quarter survey was modified to collect COVID-19 specific data, asking about delinquent patterns for the months of April, May, and June 2020. The results demonstrate that delinquency was very low, with a majority of rental providers responding that 95% of renters paid their rent.
“The Q2 report continues to show relative stability in the apartment market,” Williams notes. Adding, “which was difficult to predict at the start of the COVID-19 pandemic.”
Over the past several months, housing providers have worked closely and diligently with residents who were impacted by pandemic hardships to create flexible payment plans and create solutions that were a win-win for everyone involved.
Vacancies Flat
The Denver metro apartment market added 1,170 new units, a net positive absorption of 3,801 units for the second quarter. In the Second Quarter, discounts and concessions were steady, coming in at $84, compared to $88 in the first quarter.
Gold Standard: While apartment construction slowed in the second quarter, building continues unabated in nearly every neighborhood. This 17-story tower will house 373 apartments in the Golden Triangle neighborhood.
“That means that 3,801 more apartments were rented than in March 2020, when the COVID-19 situation started to evolve, indicating that demand for rental housing is still very strong,” Williams points out.
The survey found the average overall vacancy was 5.1%, which is down from 5.9% in the previous quarter, but virtually flat compared to a year ago. This is in line with historical patterns, which show slightly higher vacancies in the first quarter compared to the second and third quarters.
More Units Opening
New blockbuster apartments are expected to open in the weeks and months ahead and will likely continue to impact rental rates. In LoDo, Market Station, a new full block development will add 225 apartment homes. Another big complex, this one a 17-story tower with 373 homes will open before yearend at 10th and Acoma in the Golden Triangle neighborhood.
Pint-Size Property: This five-story micro-apartment complex nearing completion on Adams St. in Cherry Creek could be one answer to the coronavirus economy. The 37-unit complex has apartments ranging from 300-800-sq.-ft. in size.
Two new developments are also nearing completion along the Speer Blvd. corridor and expected to open this year adding 413 apartment homes. The Modera West Wash Park with its two sharp points will add 242 apartments averaging 864-sq.-ft. in size. Then at Speer and Logan, The Bromwell will add another 171 homes with leasing beginning to get underway.
In Cherry Creek North a five-story micro-apartment complex is nearing completion at 135 Adams St. Depending on price, the 37-unit complex ranging from 300-800-sq.-ft. in size could become a popular coronavirus economy size-style. Despite the new apartments opening and additional projects being proposed, construction of new apartments did slow in the second quarter. Year over year construction during the period totaled just 8,978 units, the lowest number since the second quarter of 2016.
Rental Assistance Rises
Denver is using Federal COVID-19 relief funds to more than triple rent and utility assistance, trying to keep people housed now that Denver’s eviction moratorium has ended. The City Council has approved adding $5 million to the housing assistance fund that started the year with a budget of $2 million.
The coronavirus economy has sparked a sharp increase in the demand for rental assistance. Britta Fisher, who heads Denver’s housing department, says the assistance program helped 996 households last year and had already assisted 704 through May of this year. “This clearly shows that households, including families, are feeling the stress of this economic and health crisis,” she says.
In the past grants have paid up to 80% of rental assistance. City Council, however, has approved eliminating the requirement that recipients pay a portion of the housing cost and now 100% of rent will be covered. Denver’s housing department says this should allow the program to more quickly get funds to residents who need rental and utility assistance.
Rent Relief Donations
Moving Experience: Coronavirus economy and health crisis is forcing many apartment renters to move. Many are relocating to less expensive apartments or downsizing to smaller units to cut cost. (Photo by Kevin J. Beaty/Denverite)
With requests for rental assistance up sharply and showing no sign of subsiding, it is becoming increasingly clear that city-federal assistance programs won’t be adequate. In May an apartment landlord group raised $74,000 from its members to establish a rent relief fund. The funds will be doled out to people to have lost income or suffered illness due to the coronavirus pandemic.
The Colorado Apartment Association which contributed $25,000 to the landlord fund is also asking other Valley residents and businesses to contribute. Funds would go to a Resident Relief Foundation to help “Coloradans help Coloradans.”
The foundation initiative is hoping to raise $10 million for rental assistance. The foundation notes that demand is so high during the current health-economic crisis it is only taking applications from tenants facing imminent eviction. The Denver Apartment Association is an affiliate of the Colorado Apartment Association.
“We dance round in a ring and suppose, but the secret sits in the middle and knows.” — Robert Frost, The Secret Sits
by Luke Schmaltz
It is practically unheard of that a retail business — one which relies heavily on public awareness of its whereabouts — would treat the opening of a new location like a covert, psi-ops, top-secret government installation. Yet, until recently, this seems to have been the case with the small-format Target store slated to open at Lowry Boulevard One in fall of 2020.
A Public Mystery
Bullseye: Residents who thought they were living in a district exceptional to generic corporate influence will have to get used to looking at this symbol every day.
The entire arc of this narrative is, in fact, shrouded in secrecy — as the issue first came to the attention of The publication from a Lowry Boulevard One resident. The Chronicle was contacted by this person who, first and foremost, insisted upon anonymity. Once agreed upon, they went on to explain a community-wide sentiment of disdain over recently-announced plans that a Target store was to be the anchor business for the retail shopping complex at First Avenue and Quebec Street.
According to this caller, the developer, in securing neighborhood support for the project, sent out numerous emails to homeowners and other residents. These emails asked recipients their opinions on the type of retail business that would fulfill their needs while resonating with the unique, upscale tone of the neighborhood. Preferences were unanimous for a specialty grocery store along the lines of Tony’s Market, Trader Joe’s or Whole Foods.
Come to find out, through Boulevard One Design Review Committee Meetings and statements on the Lowry Redevelopment Authority website, that the space is slated to host a small-scale Target store — not exactly the brand that comes to mind for rounding out a one-of-a-kind, distinctive, freshly-reimagined residential district. The space in question currently is a vacant, partially developed 30,000 square-foot storefront facility — no doubt a consistent subject of curiosity and concern for area residents.
Confidential Solidarity
Requests for commentary on this issue were either deflected to other entities or ignored entirely by the Lowry Redevelopment Authority, Denver District 5 City Council Office, Lowry United Neighborhoods (LUN), Lowry Community Master Association (LCMA), Boulevard One Master Association (BOMA) and to some degree — Target Corporate Headquarters.
Construction: The construction at Boulevard One is underway, yet far from complete.
Mary Carr, Executive Director of LCMA responded in an email explaining: “Boulevard One is actually its own Master Association and is not a part of the Lowry Community Master Association (LCMA) and for that reason the LCMA is not involved in any of their development decisions. I have cc’d Jean Lindholm with the Lowry Redevelopment Authority — she can get you over to the appropriate person with the Boulevard One Master Association.” No follow-up communication from Lindholm was ever received.
Meanwhile, multiple attempts to communicate with District 5 City Council Members, LUN and BOMA were ignored entirely and only after numerous emails and voicemails, Jill Lewis, a Target Corporate Headquarters Communication agent, finally offered a definitive statement via email on the matter: “At Target, we continuously explore possible locations for new stores, including in the Denver area. We are currently focused on new store growth with our small-format stores, which are smaller than our general merchandise Target stores and are located in dense urban and suburban neighborhoods as well as college campuses. I can tell you we are pursuing the opportunity to reach guests in the Lowry neighborhood, and at this time, we don’t have any additional information to share.”
Bankrupt Beginnings
Rewind to January 2020 when Lucky’s Market — the original planned occupant of the retail space — filed for Chapter 11 bankruptcy in a motion to close 32 of its 39 locations. This effectively took them out of the running for the property. According to the Lowry Redevelopment Authority (LRA) meeting notes for May 2020, “The LRA has repurchased the property as of May 14, 2020, and notice of repurchase has been given to CK under a Right of First Offer (ROFO) agreement. CK intends to give notice of their desire to purchase the property from the LRA within the next few days with the selection of a closing date.”
Signage: As of August 12, 2020, the Boulevard One construction site signage still identified Lucky’s Market as the anchor retail business of the development.
Throughout the remainder of the meetings notes, the future owner of the property is referred to simply as “CK.” Further investigation into Boulevard One community plan and lot plan schematics, “CK” is revealed as Confluent Development/Kelmore Development Co. The former’s website describes the configuration as: “Confluent Development and Kelmore Development serve as co-owners and co-developers for The Boulevard at Lowry, a 200,000-square-foot commercial mixed-use redevelopment project in the heart of Denver’s revitalized Lowry neighborhood. Situated on more than five acres, the 1.5-block infill development will consist of retail, restaurant, office and entertainment space, including a restaurant sitting on the community park across Lowry Blvd.” Not surprisingly, no qualified representative from “CK” was available to comment on the situation for this article.
Meet The New Neighbors
What Could Have Been: A conceptual artist’s rendering of what the Boulevard One retail complex was supposed to look like.
According to LRA meeting notes from July, 16, 2020, the plan to lease the property to Target was announced on July 7 via virtual open house meeting. The plan has since been added to the LRA website and the Boulevard One website with the following statement: “The store would offer a shopping experience tailored to the needs of local guests, including free and convenient same-day services such as Order Pick Up and Drive Up. Target stated they would look forward to building a local team of talented members who will help them serve the Denver community. The developer also shared that they continue to engage and are also in advanced negotiations with multiple specialty grocers to join the project, either on the current parcel or an adjacent parcel.”
The 30,000 square-foot building which will house the small-format Target is just one-fourth the size of a normal store, which makes one wonder which of the many attracting features may be left out due to size restrictions. Lifelong loyalists to the corporate brand may see the opening of another branch of their favorite retail destination. Yet, upon entering, they may be taken aback when they realize there may be no pregnancy-detecting buying algorithms analyzing their purchases for coupon targeting, no open breastfeeding areas in either the electronics or housewares departments and no refrigerated Doritos for their famous “Walking Tacos” recipe. The latter is a brand-specific marketing original — which instructs shoppers to crush up a bag of Doritos, add taco ingredients and enjoy the concoction with a spoon. If this practice were to become commonplace at Boulevard One, residents and stakeholders alike would have another situation to be secretive about.
Councilwoman Candi CdeBaca is a favorite of ours on the Denver City Council. It is not that we agree with all of the positions or actions of the self-identified Marxist, but she actually tries at times to make a difference in improving the lives of everyday Denverites. Over half of the City Council is owned and operated by high-density developers who, of course, also control Mayor Hancock.
CdeBaca is leading the fight to save Park Hill Golf Course as open space against Council members like Kendra Black, Chris Herndon and Stacie Gilmore who can’t wait to turn Denver into a fully paved urban jungle for the fun and profit of high-density developers.
Thanks to CdeBaca’s unwavering support, Councilwoman Amanda Sawyer’s proposal that the City Council must approve mayoral appointments will go to ballot this fall, a badly needed reform we strongly endorse.
CdeBaca has many other ideas and reforms and she is the exact opposite of the do-nothing City Council members during the first eight years of Hancock’s maladministration. One idea of CdeBaca is to replace the Denver Police Department with an unarmed “Peace Force” without the power to arrest. That idea went down by an 11 to 1 vote, most Council members giving their usual excuse that they had not had enough time to consider the same.
For decades the Denver City Council has approved paying out tens of millions to settle police excessive force lawsuits without ever considering what could be done to remedy the problem. As reporter Robert Davis points out in this issue [Deep Roots: Why It’s So Hard To Fire A Police Officer For Misconduct In Denver, starting on page 5], the problem goes way back in Denver’s history.
Getting rid of the police may sound nice to some, but the actual results would not be pretty. In Seattle’s so-called “Chop Zone” this summer there were no Seattle police, but that did not result in a “Summer of Love” as predicted by Seattle Mayor Jenny Durkan, but rather a melee with plenty of violence. We doubt that CdeBaca’s “Peace Force” will bring peace, but rather privatized violence which will drive the average citizen out of Denver.
But that does not mean we should do nothing. The reforms instituted by the State legislature this past summer are a good start, but are not enough to solve Denver’s police brutality problems. Some huge percentage of the brutality cases come from an amazingly small number of police officers in Denver. Everyone knows who they are, but no one can drive them out of the police force.
The solution is surprisingly simple. Change the City Charter and abolish the “Civil Service” system which only apples to the Denver police and fire departments. All other city employees come under the regular “Career Service” system. The Civil Service system was put into the City Charter in 1904 by then Mayor Robert Speer to protect all of the brutal and corrupt police and fire employees that he once was in charge of as police commissioner and fire commissioner. He depended upon them to become mayor. So he wanted to make sure they could not be fired.
Get rid of the 116-year old Civil Service system and put it under the Career Service system and abracadabra the entire extremely expensive Rube Goldberg contraption to protect corrupt and brutal cops goes away. Of course, firing a bad average Denver employee is not easy, but is comparatively simple compared to getting rid of a bad cop under the Civil Service system. The reform will save millions in lawsuit settlement costs.
Will any Council member dare to take on the relatively simple solution. Well certainly not the Mayor’s cronies on the City Council, but Council members like Candi CdeBaca and Amanda Sawyer just might have the guts to do so. Here’s hoping.
Music routinely triggers that yearning feeling and September — the iconic Earth, Wind & Fire song — reminisces over a nostalgic period that took place in the month of September. As the Valley begins the transition from warm to cool this month we’re hoping along with everyone else that September will be chasin’ the coronavirus away.
The doo-wah virus pretty much chased the first six months of 2020 away. Now our souls are singin’ setback the virus while chasin’ the clouds away, oh yeah!
Here are our heart ringin’ choices for shopping, dining and entertainment heaped with warmth, passion and color to keep you glowing as crisp and golden as an apple:
3 Join dance, cardio, meditation, yoga and other 60-minute classes open to all levels offered multiple times at city’s Sculpture Park on Tues.-Thur., Sept. 1-29. Information: artscomplex.com/sculptureparkfitness.com.
3 Watch classic films from your car at Red Rocks on lower south lot 2 Thurs. through Sun. Sept. 3-27, 7:30 p.m. Information: denverfilm.org.
3 View the Rocky Mountain Bonsai Show Sept. 5-6 at Denver Botanic Gardens, Sat. 9 a.m.-8 p.m., Sun. to 4 p.m. Information: 720-865-3500.
3 For a thrill of a lifetime, rappel down 36-stories at 1670 Broadway Office Bldg. Sept. 10-12 to fund Cancer League. Information:cancerleague.org.
3 Enjoy lunch and dinner at Civic Center Park — the centerpiece of Denver’s green space — from 20 food trucks on Wed. & Thur. Sept. 2-Oct. 15, 11:30 a.m.-1:30 p.m. and 5:30-7:30 p.m. Information: civiccentereats.com.
3 Experience extra good vibes shopping 55 diverse stores in stress-free Glendale, just minutes from Cherry Creek. You’ll find popular-unique retail, dining and entertainment brands. Information: glendale.co.us.
3 Enjoy virtual gala at home with charcuterie board for two and a bottle of wine to aid Mental Health Sept. 17, 5:30 p.m. Information: 303-756-9052.
3 View the provocative religious-political commentary art exhibit Holy Moly at Niza Knoll Gallery, Sept. 18-Oct. 31. Information: 303-953-1789.
3 Support The Lowry Foundation while enjoying food, libations and ice cream at the Lowry Beer Garden and Rocket Ice Cream Sept. 24, 5-9 p.m. A portion of sales on dine-in and take-out at the benefit event will be donated to the non-profit to meet the needs of the historical neighborhood. Venue is relaxing family spot with communal tables and outdoor patio offering beers, burgers and brats. Information: 303-344-0481.
September is a 30-days long goodbye to summer, to a season that left everyone happy but weary of the warm-windy weather. Combined with social distancing and masks, the days dragged on due to the threat of sickness. Life, like the air, didn’t feel fresh. It made us uncomfortable because it was stifling and sometimes suffocating.
Summer clouds dwindle in September and it’s the year’s sunniest month in Denver. Days cool down quickly, dropping around 12 °F by the end of the month.
It’s the end of summer and the beginning of fall. Known as Indian summertime, it’s the transition from warm to cool. September days are indeed here, promising summer’s best of weather and autumn’s best of cheer. Notwithstanding the coronavirus, “Try to remember the kind of September when life was slow and oh so mellow.”
— Glen Richardson
The Valley Gadfly can be reached at newspaper@glendalecherrycreek.com.
