The Denver Metro Apartment Vacancy and Rent report for the second quarter of 2018 shows that more than 3,435 new units have been added to Denver, yet absorption is outpacing the new units delivered.
“Absorption was positive for the quarter with 3,875 units being absorbed. The absorption and new supply numbers will continue to be watched closely with significant new additions expected to the apartment stock over the next several quarters,” says Ron Throupe, associate professor of real estate and construction management at the Daniels College of Business and author of the report. “The overall vacancy rate was at 6 percent.”
According to Throupe’s research, the overall average rent for the last 10 years has increased from around $800 in 2002 to $1,484.02 this quarter. Rent increased this quarter $64, up from $1,378.83.
“The existing and older stock (Class B and Class C) properties are increasing rent at a greater rate and closing the rent gap between Class A properties,” Throupe says. “The newer properties compete for tenants who are willing and can afford what these properties offer, but competition for tenants and new development decreases their pricing power. While other communities with a strategic location advantage or rents less than the more recently completed projects have pricing power. And in some ways the new projects help lift the rent expectations of the overall market.”
The Denver Metro Area Apartment Vacancy and Rent Survey is conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates. It’s published by the Apartment Association of Metro Denver and sponsored by The Colorado Department of Housing.
This survey is conducted via mail and online submissions. It includes only those units with a certificate of occupancy. The second quarter 2018 survey includes information on 125,122 apartment units.
For interviews with Ron Throupe, please contact Kristal Griffith at Kristal.firstname.lastname@example.org. To obtain a copy of the Denver Metro Area Apartment Vacancy and Rent Survey report, please contact Christopher Dean, vice president of communications for the Apartment Association of Metro Denver, at 303-329-3300 or visit www.aamdhq.org.