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June 26, 2014 10:10 PM

Apartment Companies Can't Keep Up With Demand

Sioux Falls, SD

Take a drive around Sioux Falls and you'll see apartment buildings going up all over town. This summer, you can expect ground to be broken on even more complexes.

Developers say they're meeting pent-up demand, in what's shaping up to be a record year for apartment building.

In the first four months of the year, 600 new apartments went up in Sioux Falls totaling $55 million in construction. Many of those new units are in a $26 million complex near Costco.

The first phase of the complex will be complete in three months.

"We get calls on this for leasing apartments every day right now," Dunham said.

There are already 13 people on the waiting list. Developer Jim Dunham says while apartment building came to a stop in the recession, people continued to move town. 

"I think what would surprise people is they see a lot of apartments going up, but yet with the permits taken out, we will not have enough to serve the demand that is out there," Dunham said.

Proof of that is the newly constructed, The Villas at Canyon Creek. The last two of ten buildings are nearing completion with a 95 percent occupancy rate. 

"I feel like we really lucked out. We came in, did the tour, filled out the application, got in right away. I think they had three left when we signed it," Coome said.

Mari Coome and her roommate Kristen Brink signed a lease for a two-bedroom apartment at The Villas today. They're happy with all the amenities, but rental rates have risen about five percent in the last two years.

"I think the price of rent is rising, just because the demand is there right now--but we're also trying to stay competitive because you want to fill that new project," Jill Madsen of Bender Midwest Properties said.

Even more projects are on the way. Dunham has two more complexes planned-- Sunset Villas at 69th and Southeastern will have 132 units. Dunham will also be building on the other side of town on West 26th street. Emerald Valley will have 120 apartments. 

"A lot of thought and a lot of projections go into building $55 million in apartments in one year," Dunham said.

But all developers are confident they're not over-building yet.

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