Denver Multifamily Market Report
Cost-Conscious Renters Gravitate to Closer-in Submarkets, While Suburban Construction Expands
Rising housing costs a boon for core-adjacent demand. In-migration and job growth have pushed rents in the CBD to an all-time high. The average effective rent in the Downtown-Highlands-Capitol Hill-Lincoln Park submarket reached $2,245 per month in the second quarter of 2022, up nearly 15 percent since the end of 2019. Given this elevated cost-of-living, hybrid work schedules have made close-in submarkets increasingly popular. North Aurora, South Denver-Englewood, Southeast Denver and Thornton-Northglenn all experienced triple-digit vacancy compression over the previous four quarters, compared to downtown's 20-basis-point decline. While this rental demand is supporting elevated rent growth, monthly rates in these close-in locales still trail that of the CBD by nearly 25 percent. This disparity should continue to fuel demand during an ongoing period of inflation and moderate income growth.