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Market Report

Denver Multifamily Investment Forecast

2020 Outlook

Wave of Tech Jobs Keep Builders Active; Urban Profile Key for Institutional Buyers

 

Firms eager to capitalize on Denver’s tech talent. Bay Area tech companies remain a key driver behind Denver’s apartment market as they relocate to the Mile High City, creating jobs in the area and capitalizing on local talent. This has brought an influx of high-wage jobs to the area from companies such as Amazon and Slack, prompting developers to deliver luxury apartments to the urban core. Downtown Denver and its surrounding neighborhoods will receive more than half of the metro’s new supply in 2020, highlighted by several 300-plus unit complexes. Despite the wave of upscale apartments, Class A vacancy dipped to the mid-4 percent range, its lowest level in four years. The Class B and C segments boast even tighter readings in the low-4 and high-3 percent bands, respectively. Sustained job creation in service-oriented fields and ultra-tight unemployment will remain a boon to workforce housing this year, keeping upward pressure on rent growth for these properties. In the past five years, the Class C average effective rent increased 41 percent, while the Class B measure rose 30 percent.

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