Q2 2025 Denver Multifamily Market Report

Highlights

• Forecasts expect Denver multifamily’s supply and demand to record a balanced level at the end of the year, but occupancies and rents aren’t projected to show improvement until mid-2026.
• Concession usage increased across the market, with around 41% of properties in the Denver market offering a form of incentive in March. This ranges from a month of free rent to 12 weeks of free rent on a one-year lease.
• Denver’s multifamily sales have begun to stabilize, averaging approximately $900 million per quarter over the last four quarters. 2Q25 sales volume was only $489M, which is significantly below historical averages.

 

Denver Demographics

• Unemployment Rate: 4.4%
• Households: 1,275,963
• Current Population: 3,072,154
• Median Household Income: $106,878

 

Denver Multifamily Market Performance

Denver’s multifamily sector recorded one of the highest vacancy rates nationally at 11.4% at the end of the second quarter. The uptick is attributed to an increased delivery pipeline as new supply has outpaced demand for the past few years. Now, landlords are offering concessions at a higher volume to drive renter demand and aid leasing efforts.

The increase in supply had a negative impact on rents. Throughout the past year, market rents dropped by 3.0%, which placed Denver in the bottom half of major markets across the country. Rents in the Class A segment recorded the largest decrease in 2024, dropping to around $1,800 per unit. Prospective residents have been drawn to Class A properties as owners have increased concessions to increase occupancy. There has been a trickle down effect on Class B and C properties as they compete with the concessions being offered at the newly- constructed properties. As such, occupancies and rents at Class B and C properties have also suffered.

 

By the Numbers

• Sales Volume: $489M
• Cap Rate: 5.2%
• Market Sale Price Per Unit: $313K
• Vacancy Rate: 11.4%
• Rent Growth: -3.2%
• Market Asking Rent Per Unit: $1,858
• Units Under Construction: 13,028
• Units Delivered: 3,511
• Units Absorbed: 3,668 | Q2 2025 | Source: CoStar Group, Inc.

 

Denver Supply and Demand Dynamics

Source: CoStar Group, Inc.

 

Under Construction

Source: CoStar Group, Inc.

 

Although 16,000 units were delivered in the past year, the construction pipeline has slowed down considerably. There are several factors that will impact the construction of new units over the next three to five years. Market fundamentals have made obtaining financing for new developments very difficult, entitlement timelines have become a significant obstacle, and the inclusion of various affordable housing policies will all contribute to a slowdown of new development. About 9,000 units are scheduled for delivery this year, which is about half the additions in 2024. The reduction in deliveries will provide supply-side relief over the next year and assist with market fundamentals.

 

Sales

Investment activity in Denver has predominantly moved to the suburbs for properties with value-add potential. One of the highest transactions recently occurred in the Greenwood Village suburb for a 420-unit apartment complex that sold for $117 million. The buyer pool has also shifted, with private investors making up about 70% of sales in the past year. Institutional buyers have largely been sidelined as they search for large, core assets that meet their investment objectives.

 

Market Sale Price Per Unit & Cap Rate

Source: CoStar Group, Inc.

 

Submarket Highlights

Source: CoStar Group, Inc.

 

Submarket	Vacancy	Market Asking Rent Growth	Market Asking Rent per Unit
Downtown Denver	11.70%	-2.90%	$1,964
Aurora	13.30%	-5.40%	$1,688
Broomfield County	14.90%	-1.50%	$2,049
Englewood/Littleton	9.90%	-1.50%	$1,724
South Douglas County	8.70%	-0.20%	$2,061