Colorado-Real-Estate-Journal_474477

August 2025 — Multifamily Properties Quarterly — Page 3 www.crej.com T he value of “home” has never been clearer. Today’s rent- ers are seeking spaces that reflect how they actually live – homes with more space, privacy, and thoughtful functional- ity. At the same time, the housing market is under significant strain. Demand for entry-level housing continues to outpace supply, and first-time homebuyers face formi- dable challenges. Limited inventory and persistently high mortgage rates have pushed homeownership further out of reach, especially for younger buyers. The numbers are telling. The typi- cal age of a first-time homebuyer in the U.S. has climbed to 38, and monthly mortgage payments are now, on average, 52% higher than rent. For many, the dream of home- ownership remains aspirational, not attainable. In response, a grow- ing segment of renters is turning toward alternatives that offer the feel of homeownership – without the long-term financial commit- ment or high barriers to entry. Enter the build-to-rent model. This housing strategy has emerged as one of the fastest-growing sec- tors in residential real estate, offer- ing a compelling solution for devel- opers, investors and residents alike. n Strategic density: Maximizing site potential in a tight market. In today’s uncertain economic landscape, developers face a complex balanc- ing act. Interest rates remain elevat- ed, construction costs continue to fluctuate, and land costs – particu- larly in high-demand regions –con- tinue to rise. These dynamics place pressure on project feasibility, and returns making density increas- ingly crucial. Developers must find creative ways to increase unit counts while still delivering liv- able, thoughtfully designed neigh- borhoods, which is where strategic site planning plays a pivotal role. A site built solely with paired BTR homes typically achieves between eight and 14 units per acre, depending on unit size, layout, and site constraints. However, integrating higher-density housing types – such as garden apartments – can push overall site density significantly higher, in some cases nearly doubling it. This increase in density is not only ben- eficial but often essential, in high- cost markets such as Colorado. n Why mixed-density communities make sense. Mixed-density com- munities that combine BTR homes with apartments provide a wide array of benefits. First and foremost, they expand the renter pool as dif- ferent housing types cater to differ- ent life stages and preferences. More importantly for investors, BTR tenants tend to be long-term renters. Studies show that residents in BTR homes stay an average of 5.6 years – more than double the typical apartment lease duration. This extended tenure leads to more predictable cash flows and reduced turnover costs, making these prop- erties highly attractive from an investment standpoint. From a community-building per- spective, mixed-density sites also foster resident retention. They pro- vide natural “step-up” opportunities. A renter might begin in an apart- ment and, over time, move into a larger BTR home within the same community. This internal mobil- ity helps maintain occupancy and strengthens neighborhood cohesion. Mixed-density developments can potentially streamline entitlements and encourage local buy-in for new housing, especially when BTR homes serve as transitional buffers between traditional single-family neighborhoods and higher-density rental. n Two models for mixed-density site planning. Developers pursuing mixed-density strategies typically adopt one of two primary approach- es – each with distinct financial and operational considerations. 1. Unified community approach: This model involves integrating BTR and apartments into one community with shared branding, operations, and amenities with a single leasing office and clubhouse. The benefits include a lower cost of development and operations, visual consistency through unified architecture and materials, and a strong sense of community identity. However, this approach can limit flexibility. As the entire property functions as one operating entity that must be sold as a single asset, Blend BTR & MF: A strategy to maximize returns Kellen Kyger Job captain, project manager, KEPHART The clubhouse at this mixed-density community is enjoyed by both the apartment and BTR residents, while the BTR residents have exclusive access to an additional club- house on site. Please see Kyger, Page 18