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In the face of uncertainties surrounding higher labor and material costs for new construction, tax reform and the prospect of supply catching up with, and maybe outpacing, demand in certain sectors, many markets in America still are enjoying a great story when it comes to the multifamily market. Denver, and Colorado as a whole, is front and center among them.

There are a variety of reasons why Denver and Colorado are thriving in the multifamily market. For example, Denver was named fourth on Forbes Magazine’s “Best Places for Business and Careers,” Colorado is home to 10 Fortune 500 companies, Google has a new campus in Boulder, oil giant BP is bringing its onshore oil and gas headquarters to Denver, the state is home to several national chain restaurants and operates as a storage and distribution hub for Midwest and West Coast cities. Not to mention, it is a place where millennials want to live.

In short, the region is appealing to both employers and the workforce in many ways and for many reasons. There were 2.67 million jobs in Colorado in December, with an additional 5,100 jobs added during December, according to the Colorado Department of Labor and Employment. The state has surely benefitted from the migration of newcomers along the Front Range. There were 57,300 new jobs added in the state in 2016 and 56,930 jobs added in 2017. Forecasts predict a slowing in job growth, but the region will continue to outpace the national average. An economic outlook released by the business Research Division at the Leeds School of Business calls for a slowing in employment and population growth, but still projects that Colorado will add 47,100 jobs and the population will grow by 90,600 in 2018. Jobs equate to demand in housing.

From Westminster to Parker, with Englewood, Lakewood, Littleton and Aurora in between, the area has experience significant new deliveries of multifamily units. New supply is being delivered in virtually every submarket. Builders delivered 10,854 new apartments in metro Denver las year (94.3% occupied) and another 12,000 unites will deliver in 2018, according to Real-Page. Beyond the actual metrics, there is a sense that Denver’s high-end apartment market may be, or is nearing, oversaturation.

In the Midst of the boom in development, the value-added space has become crowded as well. Older existing Class B multifamily built in the 70’s, 80’s and 90’s is ripe to be renovated. The value proposition versus shiny new Class A product is compelling for both owners and renters alike. Only time will tell if Denver’s strong demographics can stand tall and absorb any oversupply without softening. Competition for renters is certainly at high tide, especially in these times during which traditional and newly minted buzzwords abound and trends oscillate and undulate. Some of you may remember going to the ballpark for a baseball game as a youngster, bringing your glove, keeping score the old-fashioned way, and waiting for the seventh inning when your mom or dad would buy you a hot dog. It was simpler then. Certainly, renting an apartment was too. Back then, it was mostly about location and price. Not that location and price are not significant considerations for renters today, but the profile of renters has changed.

Today, there is so much more to consider. For example, proximity to public transportation, retail centers, restaurants, and grocery stores; the quality of the fitness centers, spin rooms, and yoga rooms; and the quality of the amenity package – doe sit offer a pool, barbeque pit, basketball court, bocce court, golf simulator or valet services? The more things change, the more they stay the same when it comes to lending to multifamily owners. Sure, lenders are subject to the same trends and assessments that all real estate professionals monitor and analyze. And, like developers of new and buyers of existing multifamily, it helps everyone when lenders exercise discipline. Supply, demand, location, sponsorship, cap rates and interest rates – are all considerations for a loan (not necessarily in that order). Banks, life insurance companies, commercial mortgage-backed securities, Federal Housing Administration and government-sponsored enterprises (Fannie Mae and Freddie Mac) may have a different take, risk profile and appetite when assessing opportunities. At the end of the day, they are all competing and seeking to identify opportunities that fit in the framework of their platform.

Each entity attempts to configure products that are business friendly. Both FHA and the GSEs have adopted programs promoting savings of energy and water usage that result in better terms (pricing-proceeds). Assets whose structure preserves the availability and affordability of subsidized rental housing for low-income renters, and often assets where rents are deemed affordable receive preferred pricing and more liberal loan structures. Fannie and Freddie both offer various to accommodate the profile of assets at various stages, such as prelease or renovation scenario.

Like the developers, owners and capital sources, lenders are seeking opportunities to work with strong operators and partners. Through the wave of metrics to assess, the emergence of trends and realities, and the influx of sophistication into even what appear to be simple deals, the essence of lending is not much different than back in the old days when a handshake and a note on a napkin would suffice.