Developer plans 330-unit apartment project
By Martin Kidston
A local developer plans to break ground this summer on a 330-unit apartment project off Mullan Road, one that could help loosen the city’s tight rental market.
Nate Tollefson of Tollefson Properties said the project consists of 12 buildings totaling 330 units. The 10-acre property is generally located behind the Carmike 12 theater off Oleary Street.
“There’s a lot of commercial around there,” said Tollefson. “Missoula is growing to the west and south, and this has great access right into Missoula.”
Tollefson described the apartments as moderately priced. The energy-efficient units will include air conditioning and sit within walking distance of a number of amenities located in the North Reserve Street area.
“We own a lot of apartments in Missoula, and vacancies are holding good,” said Tollefson. “Once we finish this project, it’ll tip the vacancies. If the scales don’t tip, we’re going to do another one.”
The 2016 housing report released in April by the Missoula Organization of Realtors found that vacancy rates across the city increased from 3.9 percent in 2014 to just 4.1 percent last year, despite the number of new units to come online in recent years.
The report described Missoula’s 4.1 percent vacancy rate as very low – well below the 7.1 percent national average. The city’s slight increase in vacancy rates had no effect on reducing the price of rent, which increased in nearly every category in 2015.
The average rent for a one-bedroom unit increase 8 percent to $664, while a two-bedroom unit increased 2 percent to $767.
“What this project could do is hurt properties out there from the 1960s and ’70s,” said Tollefson. “I think a lot of renters will leave the older units to come live in the new ones.”
Despite the city’s housing needs, Tollefson said it’s not easy to find land zoned for larger projects.
“There’s not a lot of land that’s zone correctly for that,” he said. “You have to infill wherever you can. Location is key.”
Tollefson said the project will break ground in August, with the first new units opening to residents in the spring of 2017. Tollefson Properties owns roughly 280 units in Missoula.