MARKET SNAPSHOT: Leasing Activity Increases in Denver
Overall leasing activity in Denver reached a near-record high during the third quarter of 2009, according to Grubb & Ellis’ Multi-Housing Trends Report—Third Quarter 2009.
Denver—Overall leasing activity in Denver reached a near-record high during the third quarter of 2009, according to Grubb & Ellis’ Multi-Housing Trends Report—Third Quarter 2009.
Absorption for the metro market achieved 1,823 new units leased, for the second-highest quarterly absorption volume in five years, and owners raised both asking and effective rents by $2 per unit, to an average of $857.
Just over 1,400 units were added to the market during the third quarter, but only 2,600 units are slated for delivery during the entire 2010 calendar year.
New additions to the market include Cornerstone and Renaissance Riverfront in the CBD, Alexan Downtown Littleton, Asbury Green and Portola at Southglenn in Denver South Central and Broadway Junction in the Washington Park neighborhood.
During the third quarter, vacancy declined 58 basis points, to 7.72 percent, following six consecutive quarters of increase. Furthermore, occupancies improved virtually across the board, as properties of all ages and locations gained new renters. Newer properties fared better than older properties overall, and properties in major employment centers also drove leasing activity trends. Overall, two-thirds of the submarkets saw vacancy declines, with significant drops in Commerce City, Lowry and Golden. Denver Southeast and Northwest had the only significant increases in vacancy, and Aurora Northeast remained the submarket with the highest vacancy.
Grubb & Ellis is forecasting that vacancy rates will continue to decline over the next 12 months.