A total of 22 new apartment communities were completed in metro Denver during 2009. These new properties added almost 5,300 units to the area’s apartment stock, expanding total inventory by 2.2 percent. The burst of deliveries followed a four-year span when Denver’s completion tallies were fairly restrained, as deliveries had been held to an average of slightly fewer than 1,800 units annually from 2005 to 2008.
More than in most metros, then, there are select neighborhoods in Denver where new supply could fill a product niche that has gone unsatisfied over the past few years. On the other hand, it’s tough to get new properties through initial lease-up at a time when the Bureau of Labor Statistics is reporting annual job loss at approximately 63,000 positions.
So how have Denver’s brand new communities fared? After leasing at new properties started slowly in early 2009, momentum picked up as the year progressed, with considerable demand seen specifically in Q3. At 2009’s close, then, almost all of the developments finished early in the year had about wrapped up initial leasing, leaving most of the vacancies specifically in communities where the last units weren’t finished until Q4.
While Denver only has seen one apartment start over the past few months, there still is a moderate block of not-quite-completed product that was begun mostly in the early to middle months of 2008. Denver expects to deliver 3,100 units this year.
Source: Greg Willett, MPF Research