Denver’s multifamily market remained hot going into 2019, boosted by a decade-long economic and population boom that has transformed the metro, particularly its urban core. Drawn by the market’s strong fundamentals, multifamily developers ramped up deliveries in 2018, when a massive supply wave of 15,984 units came online for a new cycle high. As a result, the occupancy rate in stabilized properties dropped 40 basis points over 12 months, to 94.7 percent as of April.
The metro’s highly educated workforce and business-friendly environment continue to attract a wide range of employers, from Fortune 500 company VF Corp. to a wave of California tech firms including Accelo, Apple, Facebook, Amazon, Quizlet and Strava. In the 12 months ending in March, employment growth was led by professional and business services, which gained 15,300 jobs, followed by education and health services (7,000 jobs) and trade, transportation and utilities (5,600 jobs).
On the investment sales front, more than $1.6 billion in multifamily assets traded in 2019 through May, following the $4.6 billion of 2018. Considering a more moderate level of deliveries this year, along with a positive outlook for the metro’s ongoing demographic and economic boom, we expect the average Denver rent to rise 2.6 percent in 2019.