Denver’s multifamily market is absorbing the final stages of an unprecedented supply surge, keeping vacancy elevated at 11.7% despite stronger demand. The market recorded 8,900 units of annual absorption, well above pre-pandemic norms, but this momentum continues to lag the 13,000 new units delivered, fueling widespread concessions and heightened renter mobility. Luxury product accounts for most new supply and demand, while middle-market properties face softening absorption as renters move up the quality spectrum. Rents are down 3.8% year-over-year, with the sharpest declines in construction-heavy submarkets. Although 12,000 units remain underway, construction starts have fallen sharply, signaling supply relief ahead and positioning the market for improving occupancy and rent performance beginning in late 2025.

 

Key Findings

• Vacancy sits at 11.7% as deliveries outpace demand, with 12,867 units still underway. Meaningful relief is expected beginning in late 2025 as construction starts have plummeted.
• Absorption reached 1,700 units, boosted by aggressive concessions across all asset classes. Renters continue to chase incentives, resulting in -3.8% annual rent growth and broad softness in middle-tier product.
• Sales volume reached $835M with private buyers dominating activity. Pricing averages $310K per unit, and cap rates have expanded to 5.3% as higher borrowing costs restrain transaction velocity.

 

Denver Multifamily Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Denver Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.8%
• Current Population: 3,076,128
• Households: 1,287,584
• Median Household Income: $108,047

 

Denver’s economy remains diverse and talent-rich, but growth has cooled from its peak. Population gains have slowed to 0.8% as higher living costs curb migration, though the market still benefits from a young, highly educated workforce. Multifamily remains the largest real estate sector, with development shifting toward suburban areas due to new affordability requirements in the city. Industrial activity is anchored by the airport but increasingly dispersed, while retail expands at a slower pace. Office faces the strongest challenges as return-to-office lags and leasing softens. Despite near-term headwinds, Denver’s industry mix and skilled labor pool support its long-term outlook.

 

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc.

 

Denver Multifamily Construction

Denver’s multifamily pipeline remains a defining market factor in Q3 2025, though activity has cooled significantly from its peak. About 12,000 units are still underway, down sharply from the 2023 high of nearly 32,000, as financing challenges, rising costs, permitting delays, and new affordability requirements curb new starts. Developers continue to focus on RiNo and transit-oriented corridors, but a wave of deliveries, 16,000 units over the past year, has intensified competition and driven widespread concessions. With construction starts at decade lows, supply pressure is expected to ease in 2025, though a large backlog of shovel-ready sites could accelerate building once conditions improve.

 

Units Construction Starts

Source: CoStar Group, Inc.

 

Units Under Construction

Source: CoStar Group, Inc.

 

Denver Multifamily Sales

Denver’s multifamily investment market showed steadier footing in Q3 2025 after two years of volatility, with quarterly volume holding near $900 million, still about 30% below pre-pandemic norms. Institutional buyers have reemerged, particularly in suburban value-add opportunities, while Downtown has lost momentum amid elevated vacancies. Cap rates have expanded roughly 50–70 basis points from 2021–22 lows, ranging from the mid-4% to low-5% for large assets and averaging in the high-5% range for smaller Class B deals. The buyer pool remains dominated by private investors pursuing lower-priced properties. While activity is expected to remain muted near term, slowing construction could bolster rent growth and draw more capital ahead.

 

Denver Multifamily Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Q3 2025 | Source: CoStar Group, Inc.

• Sales Volume: $835M
• Price Per Unit: $310K
• Cap Rate: 5.3%
• Vacancy Rate: 11.7%
• Rent Growth: (3.8%)
• Asking Rent Per Unit: $1,816
• Under Construction: 12,867 units
• Delivered: 3.2K units
• Absorbed: 1.7K units