Real estate experts divided over light rail

Posted 7/8/10

Despite recent reports that apartment seekers will pay more to be within a quarter mile of a light rail stop, real estate experts say the issue is …

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Real estate experts divided over light rail


Despite recent reports that apartment seekers will pay more to be within a quarter mile of a light rail stop, real estate experts say the issue is more complex for Littleton.

In recent years at least two luxury residential complexes have been built in downtown Littleton: Alexan Downtown Littleton and Nevada Place. Both boast proximity to the downtown light rail stop as an amenity.

For Jonathan Miller, a developer with Camelback Development, which is overseeing the Nevada Place project, light rail proximity was a major factor in choosing the location on Nevada Street.

“It was a huge factor in our decision,” Miller said. “That was absolutely a consideration because we believe it’s a lifestyle decision to be able to leave your car in the garage.”

When finished, Nevada Place will have a total of 68 units for sale, ranging from 1,400 to 1,800 square feet. Prices for the condominiums range from $300,000 to $500,000.

Miller said the original target market for Nevada Place was a more mature demographic, without children or pets. But Miller now says young, urban professionals find the condos attractive, in part, because of their proximity to the light rail station.

“Since the light rail has come to Denver we have a whole generation of young professionals that say, ‘hey this is viable option for getting around,’” Miller said.

But for people who are looking to rent instead of buy, the light rail might not be as big of a consideration.

Kurt Krantz, the owner of Littleton Real Estate Company, suggests that for those with lower income, the light rail is not a draw. Krantz says he prices apartments based on square footage; proximity to the light rail does not factor in.

Littleton Real Estate Company manages about 350 properties in the metro area. Many of those properties cost under $1,000 a month and Krantz says that for those people, proximity to the light rail stop is not a factor.

“The majority of my rentals from $400 to $600 don’t care,” he said. “I think there’s an oversupply of properties for sale along the light rail right now. I think that rail line is overbuilt.”

But others disagree. Gordon Von Stroh, a professor of management at the University of Denver Daniels College of Business, says that most of the properties along the light rail have a vacancy rate lower than the metro area average. According to Von Stroh’s research for the month of March (June numbers were not complete yet), the vacancy rate for the metro area was 6.5 percent. Five percent is an ideal rate, Von Stroh said.

Littleton’s rate was 5.7 percent, the area around Park Meadows was 4.2 percent and Arapahoe County south, along the I-25 corridor had a 3.2 percent vacancy rate. All of those areas are close to light rail stops.

“What I’m getting at is that having access to the light rail is a relatively important factor,” Von Stroh said. “I think it’s one of the factors in the low vacancy rate.”

Von Stroh says light rail use and whether someone will pay more to live close to it also have cultural influences.

“The urban, young professional that has a comfort level of using light rail or for people who have grown up in metropolitan areas, they are going to be more oriented toward using light rail,” he said.

Judging by the number of cars in the parking lots at the Mineral and downtown Littleton stations, the light rail seems to be a popular mode of transportation and commuting. But whether people in Littleton will pay more to live near it remains to be seen.

Miller says only nine of the 68 units have been sold so far, even though the building is expected to be ready for occupation this fall.

“For me to say I wasn’t worried about the economy would be untruthful,” Miller said. “Sales are not as brisk or as good as I would like them.”

According to Alexan Downtown Littleton’s website, there are 29 units available that range in price from $849 to $1,455 per month out of a total 350 units. There has recently been a sign spinner on the corner of Santa Fe Drive and Prince Street advertising availability in the Alexan.

And while the light rail may be an important factor when choosing housing for some, it’s not the only factor.

“I think it has value just on its own, but when you combine the light rail with the value of other amenities: walkability, walking to restaurants, shopping, entertainment, central historic shopping district, it can be cumulative,” Miller said.


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