Special Report: Denver Multifamily Performance, 4Q19

Absorption to Hit Record High in 2019; West Coast Buyers Find Strong Alternative in Denver

December, 2019

 
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Vacancy plummets as unemployment remains compressed. Increasing development remains overshadowed by strengthening demand as the metro is on track to log a 130-basis-point drop in two years amid the completion of 19,000 units. High-wage jobs in the urban core and Tech Center continue to benefit Class A apartments, pushing vacancy into the mid-4 percent range. Workforce housing is also witnessing strong demand, buoyed by Denver’s 2.7 percent unemployment rate. There are more than 16,000 apartments underway in the market, with delivery dates extending into 2021. Owners of existing properties are also taking note of the robust demand trends, realigning rents to meet market conditions, particularly in the Class C segment, where vacancy sits under 4 percent

Report Highlights:

  • Denver will hit its cyclical high this year as developers continue flocking to the area seeking to capitalize on persistently strong demand

  • Amid the absorption of 11,300 apartments, metro vacancy is set to drop to 4.5 percent

  • Rent growth will register its highest mark in four years

  • The metro’s significantly tight unemployment rate continues to weigh on hiring activity

  • Strong growth on the metro’s far eastern side continues to attract new development

Market ReportPeter StandleyMultifamily, Performance