Denver metro area apartment rents are expected to grow 4.9% in 2014 even as some 7,400 new apartments are coming online according to a 2014 forecast by Hendricks-Berkadia.  In 2014, builders are expecting to deliver 7,400 rental units, however in 2015 deliveries are expecting to drop to 5,500. Because of Denver’s strong employment growth which is higher than the national average, the rent growth is expected to remain robust.  A total of 5,560 new apartments were delivered in 2013 which was an increase compared to 2,170 in 2012, although, over the past decade, the annual absorption averaged 4,200. Year-end apartment vacancy stood at 4.4%, down half percentage point from 2012 however, average asking rents jumped 6.6% year over year, to $1,115 per month. 2013 was a record year for apartment builders with 5,560 new apartments delivered which was significant increase compared to the 2,170 delivered in 2012. In addition, multifamily permits grew 7.9%, to 8,800 units in 2013 although well below the 168% increase in permits in 2012. At the end of 2013, there were more than 11,000 apartments under construction with many more in the pipeline.  The highest rent increase was the Aurora/South area which grew 7.2%, while central Denver posted the highest average rents at $1,527 per month. The lowest vacancy rate was Douglas County at 3.7%.

Forecast for 2014 for Denver metro area:

  • Vacancy rate expected to increase to 4.9%
  • Permits applications to drop 26.1%, to 6,500 units by the end of the year, partly because of the expected rise in the vacancy rates.
  • Average asking apartment rents projected to increase 4.9%, to $1,170 per month.