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Category: Multifamily Tags: Colorado, Denver, Market Outlook

2024 Denver’s Multifamily Market Outlook

Break It Down

  • Total Transactions: 54
  • Out-of-State Buyers: 22
  • In-State Buyers: 32
  • % of Out-of-State Buyers:  40.74%
  • % of In-State Buyers:  59.26%

Properties >25 Units

  • Total Transactions: 23
  • Out-of-State Buyers: 17
  • In-State Buyers: 6
  • % of Out-of-State Buyers: 73.91%
  • % of In-State Buyers: 26.09%

Buyers By State

  • Colorado: 32
  • New York: 2
  • Arizona: 1
  • Virginia: 2
  • Wisconsin: 2
  • Florida: 1
  • California: 13
  • Illinois: 1


The above data is beating market expectations and bringing attention from out of state buyers. In 2023, between January 1 through March 27th, 54 properties were sold here in Denver market and broader region. When looking at properties sized 25 units or greater we are seeing 73.91% of buyers coming from out of state which brings credibility to the notion that out of state capital is rushing to the Denver market.


We are seeing a shift and consistency in the capital markets which is improving transaction velocity and bringing eager buyers to the market and increasing excitement from sellers who believe top of market prices are achievable. Denver’s market is starting to take a turn from the previous six months’ historically low transaction velocity.


Net absorption was positive at 3,666 units in Q4 of 2023, bringing the year-end total to 11,510 units. Demand remained strong as metro Denver recorded the seventh highest Q4 2023 net absorption and ninth highest annual net absorption across all markets in the U.S. Historically, the fourth quarter experienced the least amount of net absorption due to the seasonality of leasing in winter months. 2023 Q4 net absorption was the third-highest Q4 absorption recorded in Denver’s history.


Supply Surplus and Debt Challenges

There are major demand needs for units here in Denver, and with the massive amount of supply coming to market this year, there will be a short-run increase in vacancies, a plateau in rents, and decreased margins. However, with the rate of absorption over the past 3 years averaging ~11,253 units, full absorption of new supply should take place in roughly 2-3 years. However, undersupply pressure will be felt in the market around one to two years in as many projects fall out due to financing issues, and new development is harder to pencil in the Denver market than ever before due to capital availability, labor cost, land cost, permitting issues, and the affordable housing act put in March of 2022. This has decreased permits in 2023 by 88%.


In 2024, Denver is facing a substantial challenge, with over $1.3 billion in debt maturing during the third and fourth quarters. This holds significant implications for sellers. The market is getting ready for a pricing reset driven by the multitude of owners compelled to sell to meet their loan obligations rather than aiming for peak market prices. As these transactions unfold, investors monitoring the market will adopt them as the latest and most relevant comparables, shaping their pricing expectations accordingly. Consequently, this shift in market dynamics will directly impact owners intending to sell in the latter half of the year. If the relevant comps do not support the price that the owner is asking, the deal will be perceived as riskier for all stakeholders involved, including lenders, buyers, and sellers, ultimately complicating the negotiation landscape.

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