Denver Multifamily Investment Forecast
Newly Untethered Workers Arrive;
Competitive Bidding Pressures Sales Prices
Arrival of coastal firms bolsters outlook for rents and vacancy. The Mile High City provides business-friendly policies and access to a skilled workforce at a lower cost than coastal cities. The health crisis accelerated the movement of tech firms to Denver as many companies chose to follow renter demand into less dense cities. In addition, Denver is more in line with coastal culture than competing markets, a motivating factor for software developer Palantir's move. Vacancy rates in urban Denver spiked when COVID-19 lockdowns began but have recovered beyond pre-pandemic levels without siphoning demand from suburban neighborhoods. Entering this year, all submarkets had vacancy rates below 4 percent besides downtown, which sat at 4.1 percent. The majority of 2022 construction will open downtown; however, in-migration will push rental demand above supply this year, putting upward pressure on rents across the metro. High-income job opportunities opening up in Highlands Ranch and Lone Tree should boost Class A renter demand in the southern portion of the metro.