Can't resist giving biggus diggus some support.
My understanding is that vacancy rate takers don't survey new projects; I think they wait until projects are at least a year old. New projects typically use a 12-18 month lease-up projection and usually pencil in lease-up incentives. That's more of a conservative proforma for finance purposes and ofc they hope to do better and in a good market much better.
Given the downtown area's relatively modest if growing size, it can easily be impacted by 2 or 3 new projects. Rentals can sit for a couple of months w/o much activity and suddenly get a surge of rentng. It's the whims of the market.
My best guess is that it will take 9-12 months before you can state a trend or concerning vacancy problems. Absorption is often somewhat seasonable so that can be misleading also but should even out over a year. In other words a vacancy "problem" that doesn't last long is not a big deal. biggus diggus could have a good sense of right now... but let's wait a few months to see how absorption goes.
The other thing to consider is that any new larger project that would break ground has about an 18 month construction period before it adds any new inventory to the market; a high rise more like 24 months.
__________________
Cool... Denver has reached puberty.
|
Threaded Mode