Top 10 Denver Submarkets by Sales Volume
- Feb 15, 2018
Both the residential and office markets in Denver performed at their highest in 2017. Multifamily properties attracted solid investments, with transactions closed in the top 10 submarkets alone having generated more than $4 billion in sales volume.
The city has been recognized as having one the fastest growing economies in the country, with office-using employment reaching a 10-year peak and companies competing for talent. One of the main factors attracting people to the area has been the affordable housing and rental prices, compared to other cities on the West coast. A vibrant downtown area offering several live-play-work communities has also been an important driver for young professionals coming to Denver.
The following list highlights the top 10 Denver submarkets ranked by total investment volume. Data is provided by Yardi Matrix and is based on transactions closed in the metro area between January and the end of December 2017.
The submarket is home to Union Boulevard-Denver Federal Center area, Lakewood’s largest employment hub, which has been attracting a growing pool of young professionals as well as investors. Five properties changed hands in the area in 2017 accounting for a total sales volume of $230 million. The largest transaction was a two-property portfolio at 409 Zang Way which Gelt Inc. bought for $107 million. Ascend at Red Rocks and Elevate at Red Rocks were built in 1981 and 2000. Together, they offer 580 units.
The city of Aurora, Colo., has been known for its affordable housing prices, with averages among the lowest in the area ($135,000). Only four properties (1,762 units) changed hands in the central and west region of the city in 2017 resulting in $237.8 million in sales volume. Aurora Hills, a 600-unit community at 11850 E. Maple Ave. topped the list with a price tag of $96 million.
8. Capitol Hill/Cheesman Park/Hale
Apartment prices in this submarket average $314,000, one of the highest price tags across the entire Denver area. Boasting a central location, proximity to several cultural venues and entertainment destinations and a mix of modern high-rises and old apartment buildings, Capitol Hill is considered a pivotal neighborhood for investors. Eight multifamily properties and more than 1,000 units traded hands in 2017 in this submarket which accounted for $331.9 million in sales volume. The submarket is also home to the largest sale closed in the Denver area—the 218-unit Steele Creek located at 3222 E. 1st Ave. UDR bought the community in the fall of 2017 from BMC Investments for $141.5 million.
Despite its suburban location, Westminster is one of those submarkets which managed to create a distinctive urban setting, according to developers. Demand has been on the rise but deliveries have been slow as builders complain that they have to compete to get approved for water and sewer taps. The submarket has been attracting both residents and investors, who see it as an advantageous commute to downtown Denver. Five properties and 1,442 units traded in the area for a total volume of $336 million. The top multifamily deal involved 8000 Uptown, a 36-unit community located at 8000 Uptown Ave. Inland Real Estate Group paid The Wolff Co. $95 million for the multifamily asset in October.
Apartments in the southwest part of Aurora, Colo., have higher price tags than the ones in the central part of the city — averaging $180,000 – but they remain under $200,000, making them highly affordable. Seven communities and almost 2,000 units found new owners, the transactions totaling $346.2 million in sales volume. At $95 million, Conifer Creek topped the list of deals closed in this submarket. The owner of the 480-unit multifamily property is Inland Real Estate Group, whose Denver portfolio surpassed 4,000 units in 2017.
The submarket has seen an increase in construction activity within the last years, due to a growing influx of corporate employers. Here, like in several other Denver suburbs, the real estate landscape features a mix of old and new buildings. The demand for multifamily properties has been on the rise, as the majority of younger residents prefer to rent than to own. In 2017, the sales volume in Englewood/Sheridan surpassed $360 million as a result of four large transactions. Kent Place Residences represented the biggest one. The 300-unit community entered JP Morgan Asset Management’s portfolio in the summer of 2017 with a $127.4 million price tag.
4. Douglas County-North
One of the fastest growing counties in the nation, Douglas Country has been attracting residents and investors due to its lightly wooded surroundings and average home prices. The submarket attracted $382.5 million in multifamily investments during the previous year. Five properties found new owners, including Legacy at Highlands Ranch, a 422-unit community located at 355 W. Burgundy St. Acquired at the end of last year, the asset cost LaSalle Investment Management $112 million.
The submarket has seen an intense sales activity within the multifamily sector, with eight properties changing hands and almost 2,000 units. The combined sales volume totaled $464 million, which secures the area the fourth spot on our list. The largest multifamily transaction was that of Bell Denver Tech Center, a 398-unit community located near Denver Tech Center. Bell Partners acquired the asset, formerly known as Presidio Apartments, for $99.2 million. The seller was San Diego-based Fairfield Residential.
The proximity to downtown Denver as well as a growing number of new communities, parks and recreation facilities have made NorthGlenn/Thornton a coveted destination for investors. With nine properties involved in transactions and a total sales volume of $534.5 million, NorthGlenn/Thornton is Denver’s second-most active submarket. Magnolia Capital closed the largest acquisition in the area for the year when it bought Haven 124, a 562-unit community located at 12255 N. Claude Court. The buyer paid Griffis Residential $124 million for the multifamily property in August.
1. CBD/Five Points/North Capitol Hill
This submarket has been welcoming a growing number of companies that are relocating from the suburbs to have access to better trasportation options, live-play-work communities and a larger pool of working people. Cranes can be seen all over the area, a sign that construction activity is booming within both the residential and commercial sectors. The 14 properties (roughly 3,200 units) changing hands generated $846.5 million in total sales volume. The priciest community was Griffis Union Station, which traded for $127.4 million. Monogram Residential Trust sold the 400-unit multifamily property to Griffis Residential in March 2017.
Images courtesy of Yardi Matrix