Denver Multifamily Rents Plunge 7% as Demand Cools
Multifamily demand is weakening in Denver. Net absorption flipped to negative territory at -474 units in the third quarter compared with the positive 3,223 posted in the previous three months. This marked the first negative demand quarter since the fourth quarter of 2022.
The Five Points/Capitol Hill/Cherry Creek performed the worst in the third quarter, with -446 units.
Additionally, rents continue to plunge, down 2.2 percent quarter-over-quarter to $1,814 per unit. And over the last 12 months, the category has tumbled by 7.2 percent.
Also, occupancy declined by 60 basis points to 94 percent.
Meanwhile, here's where you can start looking at the positives. Most notably, Denver's multifamily sales surged from $506 million to $919 million. However, keep in mind that the number is about half the $1.8 billion posted last year and the average price per unit dropped on a quarterly basis from $305,000 to $278,000. The largest sale involved a property called Avana Belmar in Lakewood, which traded hands for $144.05 million. The next two largest were Broadstone Sterling Ranch and Gateway at Arvada Ridge, going for $121 million and $100 million, respectively.
Another positive is that supply continues to decline, with only 1,659 units delivered — marking the third straight quarter of drops. Moreover, completions are down 62.8 percent from the 12 months prior.
Source: GlobeSt/ALM