Special Report: 2020 National Multifamily Forecast

Continued Wave of Tech Jobs Keeps Builders Active; Colfax Avenue Fosters Bevy of Investment

January, 2020

 
4Q19 Denver Local Apartment Report_Page_1.jpg

Bay Area tech companies remain a key driver behind Denver’s apartment market as they relocate to the Mile High City, creating jobs in the area and capitalizing on local talent. This has brought an influx of high-wage jobs to the area, prompting developers to deliver luxury apartments to the urban core. Despite the wave of upscale apartments, Class A vacancy has dipped to the mid-4 percent range, its lowest level in four years. The Class B and C segments boast even tighter readings in the low-4 and high-3 percent bands, respectively. Ultra-tight unemployment will remain a boon to workforce housing this year, keeping upward pressure on rent growth for these properties. In the past five years, the Class C average effective rent increased 41 percent, while the Class B measure rose 30 percent.

Report Highlights:

  • Reduced deliveries tighten vacancy

  • The metro’s 2.6 percent unemployment rate will restrain hiring activity

  • Vacancy will contract to 4.4 percent in 2020

  • Rent growth will exceed 4 percent for the third year in the row

Market ReportPeter StandleyMultifamily, Performance