Denver Multifamily Report – Winter 2019
Although deliveries hit a cycle peak, the metro’s rapidly expanding economy and steady demographic expansion continue to boost a sturdy rental market.
Denver rent evolution, click to enlarge
Denver’s rapidly expanding economy and steady demographic expansion continue to boost a sturdy multifamily market. Although deliveries hit a cycle peak last year, occupancy in stabilized properties stood at 94.9 percent as of December—flat over 12 months—a sign that absorption remained healthy and rental demand is at least on par with supply.
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The metro added 45,300 jobs in the 12 months ending in November for a 2.8 percent expansion, 70 basis points above the U.S. figure. Trade, transportation and utilities led gains, adding 11,200 positions. The sector could further benefit from the $1.2 billion infrastructure project set to widen Interstate 70 in northeast Denver. Professional and business services gained 11,000 jobs and office-using employment remained strong; just last year, the metro added 3.3 million square feet of office space to its inventory. The local tech scene is rapidly evolving, and information added 2,100 positions for a 3.5 percent hike, the largest year-over-year expansion of any sector.
Denver sales volume and number of properties sold, click to enlarge
Core areas remain vital, with CBD/Five Points/North Capitol Hill topping the list for both deliveries and transaction volume last year. And despite the 14,457 units that came online in 2018, demand remains strong across the metro and rents continue to advance. Considering Denver’s relatively healthy fundamentals, we expect the average rent to rise 3.4 percent in 2019.
