Supply Endures, Slowing Economy Impacts Deals
Although Denver’s economy slowed in 2023, some multifamily fundamentals maintained a solid performance, notes the latest Denver multifamily market report. Year-over-year, rents recorded a mild 0.1% rate of growth, with the average at $1,903. The metro trailed the U.S. figure, which rose 0.4% year-over-year, to $1,713, as of November 2023. Meanwhile, occupancy declined just 30 basis points in the 12 months ending in October, to a still healthy 95.1%.
Employment expanded just 0.6%, or 15,400 jobs, in the 12 months ending in September, well behind the 2.4% U.S. average, according to the Bureau of Labor Statistics. Additionally, five sectors lost 13,000 jobs combined during the interval. The financial activities sector lost the most positions (-5,700 jobs), heavily impacted by the recent evolution of interest rates. Next in line were trade, transportation and utilities (-3,200) and information (-3,000). The sectors that recorded the highest gains were government (14,900 jobs) and leisure and hospitality (7,300 jobs).
Denver’s stock expanded by 8,259 rental units in the first 11 months of 2023. While the number of new projects waned, the metro still had a consistent 42,334 units under construction, placing Denver fourth in the country for the largest pipeline as of November. Meanwhile, investors traded $2.2 billion in multifamily assets, for a price per unit that declined 4.4% year-over-year, to $322,036 in November.
Read the full Yardi Matrix Denver Multifamily Market Report: January 2024
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