Denver Multifamily is Thriving

The Denver multifamily market entered the new year with positive investor sentiment driven by the strong renter demand. This momentum carried well through the last 90 days with another impressive quarter in the books. The city’s roaring economy, countless recreational activities, and spectacular weather all year round makes for no shortage of migrants coming to the area in search of an apartment. And with the red hot housing market making it difficult to purchase a home, more people are forced to rent adding to the markets competitiveness. To meet this immense demand, multifamily construction picked up this quarter by increasing units on the way to more than 23,600, the most construction activity the city has ever recorded. The city also delivered 1,589 units in the past 90 days, but despite the increase in inventory, vacancy remained stagnant hovering around 6.4%. To no surprise, absorption remained positive this quarter at 1,437 units and will continue to remain positive through the year. Lease rates grew 12.7% year-over-year reaching $1,743 a unit, and no signs warrant a decrease in these prices in the near future. With investors attracted to the city’s low vacancy, rising rents, and steady inflow of new migrants, over 3,500 units have sold so far this year generating a transaction volume of $1.19 billion. Looking ahead, deliveries will pick back up, investment activity will accelerate, and the multifamily market will ride the momentum of a monumental 2021 to another notable year in 2022.