With a net increase of up to 10,000 new troops expected at Fort Carson through 2007, housing for military soldiers and their families has become a focus for multifamily owners and managers.
But despite the infusion of people, occupancy rates are not expected to reach all-time highs.
Apartment vacancies have shrunk to an average of 8.4 percent citywide, according to a second quarter 2005 report prepared by Doug Carter of Sperry Van Ness.
He also said that prior to the arrival of 3,700 new troops to Fort Carson from Iraq and South Korea in June, that same citywide figure stood closer to 12.5 percent.
Numbers, however, can be misinterpreted, said Griffis Blessing Senior Vice President Pat Stanforth.
She sees the rental market as stronger than two years ago, but occupancy figures have not yet returned to the highs of 2001 and 2002.
“Both here and in Denver, owners of older properties – pre-1980s – are still having to offer plenty of incentives and rents are still under where they were two or three years ago,” she said.
That correlates with Carter’s statistics which show pre-1980s apartments renting for an average of $523 per month, while upscale apartments built since the 1990s command average rents of $828 per month.
The deployment and redeployment of troops has mirrored the ups and downs of the rental market.
After hitting lows of 73 percent and 77 percent in April and May of 2003, for example, occupancy rates at Cheyenne Crossing Apartments, off Highway 115 northwest of Fort Carson, rebounded into the 90-percent range by fall 2003.
The same was true of Cobblestone, a 208-unit town home community in the same neighborhood, where April 2003 saw a drop in occupancy to 72.6 percent before rebounding to 76.7 percent in May, 87.1 percent in June and topping out at 96 percent in July 2003.
Because the initial 10,000 to 11,000 troops deployed to Iraq in early 2003 did not return until spring 2004, Stanforth attributed stable occupancy rates at the two properties to a higher number of non-deployed officers and the complex’s reputation as a favorite housing community.
In contrast, another apartment complex on the east side of Highway 115 experienced a vacancy rate of almost 40 percent during the same period. Stanforth said the complex is home to smaller one-bedroom units rented by bachelors and single soldiers.
“They gave notice right away, and didn’t return until spring 2004,” she said.
Along Powers Boulevard, the Creekside at Palmer Park 328-unit community opened in 2002 and continues to maintain 90-plus-percent occupancy rates and higher than average rents.
In checking reasons for move-outs before year end 2005, Stanforth said that no tenants at the east side apartment complex have given “Temporary Assignment Duty” as a reason for departure.
“We currently only have 19 units available,” she said, “which equates to a 94.2 percent occupancy rate for now.”
So will rents begin climbing again by early 2005? That likelihood, in response to Base Closure and Realignment deployments, appears dim for now.
In addition to the return of almost 10,000 troops from Iraq in mid-2004 and the arrival of 4,000 soldiers formerly stationed in Korea, a spokesman for Fort Carson projects another 3,600 troops will be deployed in late fall.
By next spring, the final surge of new soldiers to Fort Carson will be complete and the total population will reach 26,000, but officials estimate at least 2,000 soldiers plus Special Forces units will continue to be deployed at any given time.
As the revised military census gels, local apartment owners can relax somewhat, though Carter and Stanforth both encourage guarded optimism.
“Our market tends to over-accommodate positive economic events in the market. Local business owners have been counting on a 10,000 troop bonanza out there, but that’s not the reality,” Carter said, adding that with deployments and Base Realignment and Closure allocations, 4,000 of those soldiers are already here.
It’s still good news, but the actual figure we should be looking at is 6,000 additional troops by mid-2007, he said. “Our market will also benefit fromincreased civilian employment and major construction projects.”
“Low interest rates and an ample supply of affordable new homes that are expected to come online by mid-2006 means some renters may choose that option,” Stanforth said, noting that even at the popular Cobblestone community, at least 16 percent of move-outs before the end of the year are leaving because of the purchase of a home.
Another factor in the equation, Carter said, is a Housing Market Analysis at Fort Carson that may result in the addition of more on-base housing.
Both the U.S. Army and the U.S. Air Force are moving ahead on plans to privatize the management of on-base properties ,as well as add new housing at Peterson and Schriever Air Force bases.
“We still don’t know the impact of that decision,” he said.