Fort Collins apartments specialize in luxury living, keep vacancy low
Karli Blackwood and Ali Fitzgerald moved sight unseen to the Trails at Timberline within a few months of each other. Both came for jobs — one from Kansas City, the other from Illinois.
Neither knew a soul in Fort Collins but both believed the amenities and programming at Trails would offer the best chance to get to know their neighbors and make new friends.
“I wanted a sense of community,” Blackwood said as she and Fitzgerald bowled a set at Trails’ regulation, two-lane bowling alley inside its clubhouse. “There are more ways to interact with your neighbors. It’s a fun community of people.”
The two met at Trails, began talking about a band they liked and became friends. They now share a three-bedroom apartment with another roommate.
Blackwood and Fitzgerald represent a new generation of renters interested in finding a community rather than just a place to live.
They’re also among a growing segment of renters fueling the city’s demand for upscale apartments.
But with 1,100 market-rate units coming online and more than 2,000 in the pipeline, some experts wonder if Fort Collins is in danger of a bubble, where oversupply pushes up vacancy rates, depresses rents and leaves hundreds of units wanting for tenants.
It’s making some developers and market watchers a little nervous, particularly as thousands of additional student-oriented apartments flood the market.
“The fastest market to reach oversupply is typically apartments,” said Brandon Wells, president of The Group Real Estate.
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By The Group’s estimation, Fort Collins can absorb about 1,500 units a year. “So far, we have been absorbing them with our job growth and inbound migration,” Wells said. At the same time, homeownership rates have steadily declined, from 70.3 percent in 2010 to 66.27 percent in 2015, according to economic data from the Federal Reserve.
Wells is not predicting a bubble quite yet, “but we are reaching some numbers that give me reason for a yellow light of caution whether it’s sustainable,” he said.
So far, demand still appears to be outstripping supply, according to the fourth quarter Multifamily Housing Vacancy and Rental Survey conducted by the University of Denver on behalf of the state of Colorado.
Multifamily vacancy rates for October through December stood at 3 percent, down from 3.3 percent a year ago. A 5 percent vacancy rate is considered a balanced market.
But vacancy rates don’t tell the full story. Vibe, Bucking Horse and Cycle — with more than 1,000 combined units — are still under construction and not included in the December survey. The survey also does not include roughly 1,160 student-oriented apartments in the pipeline that could house more than 3,660 residents and pull students out of market-rate apartments.
A new breed of renters
The rental market is affected not only by Fort Collins’ growth, but also by a changing demographic that sees millennials delaying homeownership, GenXers and boomers downsizing, and a lack of single-family homes and condominiums on the market, Wells said.
For Blackwood and Fitzgerald, the amenities and community are worth the price, especially when split three ways.
Depending on what happens with interest rates, more potential buyers could be priced out of homeownership and into rentals, Wells said, which “will take them out of the housing market and drive (rent) prices upward.”
Lack of condos, typically the most affordable entry into homeownership, is driven by a construction defects law that makes it easier for buyers to sue developers, Wells said. The law spooked builders away from condos and into the apartments. Even though the state legislature last year tempered the law, few local builders have returned to the condo market.
“There is almost a stalemate in the wait for someone to test the waters in the region,” he said. “It will take a developer to put a project online to see how things go.”
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Until then, the construction defects laws and lack of condo opportunity will continue to fuel apartment development and growth, Wells said.
And that has resulted in a plethora of apartments for renters looking for high-end finishes that replicate a “for sale” product and amenities that create a certain vibe.
With the exception of income-restricted units, new apartments are doing little to mitigate rent prices, as most new construction is leasing at or above the city’s median rent of $1,218 for a one-bedroom space and $1,349 for a two-bedroom, two-bath.
Utilities, garage or storage spaces cost extra and can add another $100, $200 or more to the rent.
Like the biggest apartment projects in the past four years, three getting ready to come on line offer stainless steel appliances, granite or quartz countertops, lavish clubhouses, 24-hour fitness centers, resort-style pools, DIY ski and bike repair shops, pet spas, outdoor gathering spots, fire pits, barbecues and coffee bars. One has a bowling alley and golf simulator.
“Stainless steel, higher-end finishes are here to stay,” said Lisa Winchester, president of the Northern Colorado Apartment Association and property manager for The Crowne at Timberline, 310 units in south Fort Collins, which opened last year.
“We have a lot of people tell me they are renters by choice. They want to travel … they want to lock and go,” she said. “A lot of young professionals want to be more fluid. They want to be able to move quickly if they get a new job.”
Demands of a new breed of renters willing to spend more than a mortgage payment are pushing developers to think beyond a couple bedrooms and a bathroom. Many renters are looking for a lifestyle as much as a home.
Must-haves these days include flexible leases; pet-friendly units; fitness, yoga and cooking classes in expansive clubhouses; outdoor living spaces; places to hang out; a bathroom for every bedroom; and stepped up finishes, said Gino Campana, developer of the Bucking Horse Apartments, 322 units that are just opening near Timberline and Prospect roads.
Bucking Horse ran fiberoptic cable to every unit, a move Campana said “future proofed” the project.
Its affiliation with the Artisan Village at Jessup Farm — part of Campana’s overall Bucking Horse development — serves as a draw for tenants.
“The proximity to Jessup Farm is huge,” he said. “People can go for a run on the trails then go up for a beer or cup of coffee,” lunch or dinner.
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Still, the number of units coming online “is spooky,” Campana said. “There is only a limited number of people.” And there is a limited segment of the population that can afford the higher rents.
Individuals earning $20 an hour could afford $1,040 in month rent without spending more than 30 percent of their income on rent. That would barely be enough for a studio at some of the higher-priced units.
Campana said his units are as affordable as they can be and well below Boulder’s prices. According to the state, Boulder’s average rent is between $1,699 and $1,760.
Rhiannon McGee, manager of Trails at Timberline, which opened nearly five years ago just north of Timberline and Drake roads, said the newer units are “all about engaging residents.”
Trails, which features a golf simulator in addition to the bowling alley in its clubhouse, has 314 units of the highest-end apartments in Fort Collins; 96.8 percent are leased, McGee said.
The Crowne at Timberline is more than 90 percent leased, with a variety of tenants, Winchester said: singles, couples, empty nesters, boomers who are downsizing and newcomers to Fort Collins settling there as they take stock of the area.
While developers watch each others’ projects, “we have to differentiate ourselves,” said Dori Brewer, vice president of multifamily operations for McWhinney, which also built Cycle at Foothills mall. “People will choose you because you are in alignment with what they are looking for.”
Cycle, with about 400 units, is bringing a dozen units online now, with another 80 due in mid-to-late March. Fewer than a dozen are currently occupied. Its pool, hot tub and gathering space off the pool are finished.
“If we don’t engage residents in a space, then it’s just a room,” she said.
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Permits
By the end of last year, permits for 695 multifamily units had been approved, a slowdown from nearly 1,000 in 2016. But dozens of projects are in the city’s planning pipeline.
“We are going to experience a little bit of a slowdown because a lot of product is coming on line,” Winchester said. “But from everything we see with all the growth continuing, I have to believe al
l the product will be absorbed.”
While Crowne at Timberline leased up within a year, that rate may slow down “with the number of units we have coming online at once.”
The apartments
Newer market-rate apartments in Fort Collins
Apartments at Bucking Horse
Year opened: 2018
Address: 2274 Yearling Drive (Off Timberline Road and Nancy Gray Avenue)
Number of units: 322
Amenities: Fitness center, clubhouse, co-working spaces, stainless appliances, kitchen islands, resort pool
Square footage: 756 to 1,506
Bedrooms: 1 to 3
Bathrooms: Up to 2.5
Rents: $1,250-$2,200
Pet friendly: Yes
Percent occupied: Just opening
Crowne at Timberline
Year opened: 2017
Address: 2001 Rosen St.
Number of units: 310
Amenities: Elevator, 24-hour fitness center, co-working space, pet washing station, valet trash pick-up, saltwater swimming pool with barbecues and seating area
Square footage: 795 to 1,992
Bedrooms: 1 to 3; 2- to 3-bedroom townhomes
Bathrooms: Up to 2
Rents: $1,265-$2,150
Pet friendly: Yes
Percent occupied: 90-plus percent
Cycle
Year opened: 2017-18
Address: 3521 Stanford Road
Amenities: Dog park, pet washing station, bike storage, garages, swimming pool and hot tub, co-working space, DIY bike and ski repair shop, social space with entertainment kitchen, gaming area, overnight guest pads
Number of units: 405
Square footage: 592 to 1,829
Bedrooms: Studio to 3
Bathrooms: Up to 2
Rents: $1,305-$2,150
Pet friendly: Yes
Percent occupied: Just opening
Trails at Timberline
Year opened: 2013-14
Address: 2451 S. Timberline Road
Amenities: Fitness center, bowling alley, golf simulator, movie theater, pet wash station, latte lounge, resort pool area with seating and barbecues, outdoor fireplace
Number of units: 314
Square footage: 552 to 1,906
Bedrooms: Studio, one, two and three bedrooms
Bathrooms: Up to 2
Rents: $1,094 for studio to nearly $4,000 for penthouse
Pet friendly: Yes
Percent occupied: 96.8 percent
Vibe
Year opened: 2018
Address: 3701 LeFever Drive
Amenities: Olympic lap lane pool, community steam room, sauna, bike shop, dog wash, movie studio, private coffee shop. bocci court, clubhouse, car wash and vacuum area
Number of units: 274
Square footage: 575 to 1,175
Bedrooms: Studio, one and two bedrooms
Bathrooms: Up to 2
Rents: $977 to $2,115
Pet friendly: Yes
Percent occupied: Not opened
Coming
Market rate apartments recently opened, under construction or in the pipeline:
Copperleaf: 94 units at 3425 S. Shields St. near Richmond Drive. In planning stage.
Penny Flats North: 71 units on Cherry Street, downtown Fort Collins. Has not been submitted to planning department.
1215 S. Shields St.: 97 units. Has not been submitted to planning department..
320 Maple Street: 29 units at the northeast corner of Maple and Meldrum streets.
The Wyatt (formerly Harmony 23): 366 units on the southwest corner of Harmony Road/Strauss Cabin Road. Finals plans nearly complete.
BrickStone: 116 units, two blocks east of the intersection of Harmony Road and College Avenue.
The Overlook: 105 units, JFK Parkway, south of Horsetooth Road.
Fossil Creek Apartments: 240 units, South College Avenue and Crestridge Drive. In planning stage.
Flats at Rigden: 100 units at Custer and Illinois. Under construction.
Ridgewood Hills, fourth filing: 146 units at Avondale and Triangle Drive. Awaiting construction.
Shields and Stuart streets: 30-plus apartments and townhomes. in planning stage.
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