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Area Multifamily Investors Reap Big Gains

DENVER-Investors in Denver-area multifamily rental buildings during the past three years booked returns on their down payments of up to 64%, not including cash flow from rents or mortgage principal reduction.

By John Rebchook | Updated on May 14, 2001

DENVER-Who needs tech stocks? Investors in Denver-area multifamily rental buildings during the past three years booked the kind of profits that used to be associated with technology stocks before they crashed, shows a new report by the Denver office of Marcus & Millichap.

Investors in buildings with 50 or fewer units averaged an annual appreciation on their down payments of nearly 63%, the report shows. Investors in complexes between 50 and 150 units realized an average gain in equity of nearly 64%. Owners of complexes with 150 or more units saw an annual equity appreciation rate of 46.7%, which equates to an average net gain in value of about $4.84 million.

The trend toward condominium conversion influences the price trends, but it isn’t the main engine behind the increase. When sales for properties intended for condo conversion are excluded, the appreciation rate remains almost the same.

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