Denver Apartment Construction Has Never Been Busier As Renter Population Swells
Stop in Sprouts Farmers Market at 35th Avenue and Central Park Boulevard in Denver at lunchtime and you’re likely to see some shoppers clad in yellow safety vests. They are just a few of the many people building the 771 multifamily units under construction within a five-block radius of the store, including the two projects circling the parking lot.
Just one block from the Regional Transportation District’s Central Park station, the area is a residential construction hot spot. Northeast Denver Housing Center is building 127 income-qualified apartments, and D.H. Friedman Properties is underway on a for-sale, 36-townhome development. Another 1,000-plus units are in the planning stages for the northeast Denver neighborhood.
But this area isn’t alone in its development boom. The corridor is a microcosm of what is happening with multifamily development across the metro area, where apartment construction has reached new heights in an effort to keep up with soaring demand.
“There’s never been more apartments under construction in the metro Denver area, ever,” Apartment Association of Metro Denver Executive Director Mark Williams told Bisnow.
People continue to move to Colorado and the state’s net positive in-migration adds to pent-up demand across the metro area. Rising interest rates also play a part, causing potential single-family homebuyers to turn to rental options as they think twice before making a mortgage commitment.
The Apartment Association’s second-quarter report showed a slight uptick in vacancy, which rose to 4.76%, just 0.5% higher than the first quarter. The AAMD attributes the rise in vacancy to recently completed properties now in lease-up, but also notes that vacancy rates have been below 6% for more than a year since the economy began to normalize after the pandemic set in.
Average monthly rents went up 5.3% over the first quarter with the average monthly rent price in metro Denver reaching $1.8K. The steady interest keeps the multifamily market attractive to developers and investors and they “can’t build fast enough,” according to Williams.
There are 40,000 units under construction across the metro area and another 71,000 in planning, Williams said. Local activity remains strong, although nationally the U.S. Census Bureau reported an 8.1% decline in private residential construction starts last month over July 2021 numbers.
The 4,700-acre Central Park neighborhood is unique in that it is one of the country’s largest urban infill master-planned communities. Central Park is the site of Denver’s former Stapleton International Airport, which closed in 1995. Now, the area is nearing the end of its 25-year master-planned build-out. The neighborhood was formerly known as Stapleton until residents voted to change the name to Central Park in 2020.
Other multifamily projects underway along the Central Park Boulevard corridor near Central Park Station include phase one of the Central Park Station Residences being developed by High Street Residential, the multifamily subsidiary of Trammell Crow Company. The project will bring 301 units to the corridor and offer a level of quality that’s a step up from current inventory, High Street Residential Principal and Senior Vice President Erik Hagevik said. Phase 1 includes secure parking in the podium and a third-floor amenity and pool deck.
“We feel like it's a strong market,” Hagevik told Bisnow. “There has been a lot of talk about the new supply that's coming online.”
He noted that in the past 12 months more than 700,000 units were absorbed across the country, which is almost double the previous all-time high of 390,000 in 2002.
“The Denver area matches that and so we're absorbing more units than we're bringing in and the pipeline is very strong for new projects going forward,” Hagevik said.
High Street Residential plans to start construction of Phase 2 of Central Park Station Residences in the first quarter of 2023. The second phase is planned for a piece of land west of Phase 1 and will include 368 units, with a mix of market-rate and affordable units. High Street hired multifamily giant Greystar as property manager, and it is working with them to determine rental rates, Hagevik said.
“We're studying the marketplace and we feel that we're in line with other TOD opportunities throughout Denver, and we're actually a little bit more affordable,” Hagevik said.
Central Park’s master plan included affordable housing in partnership with the city of Denver, and Hagevik said High Street Residential has an agreement with Brookfield, Central Park’s master developer, to construct affordable housing obligations off-site.
Only a few undeveloped parcels remain of the land purchased from the airport that is now Central Park. They’re all spoken for, as Brookfield has sold them to other developers or its own residential development arm. Build-out of the final neighborhood in Central Park, the North End, began in 2019. Rumors of a potential redevelopment of RK Mechanical’s current home on its approximate 14 acres at 3800 Xanthia St. may mean there is just a bit more room to build more multifamily in the neighborhood.
Other multifamily projects underway or planned in Central Park include:
Solana Park is a 307-unit apartment complex and three-story parking structure under construction on the block along Central Park Boulevard between 32nd and 33rd avenues. The developer is California-based Reylynn Properties, which also has a 270-unit apartment building under construction at East 56th Avenue and Boston Court north of Interstate 70.
Northeast Denver Housing has another 90-unit income-qualified complex under construction along Central Park Boulevard at East Prairie Meadow Drive in Central Park north of Interstate 70, scheduled for completion in January 2023.
Brookfield has plans for 144 for-rent townhomes on the 7-acre block between 35th and 36th avenues and Uinta and Ulster streets. Documents were submitted to Denver’s planning department earlier this year and it appears the project may break ground in the near future.
Construction fencing also recently went up around Price Development Group’s 3-acre site on the southeast corner of Central Park Boulevard and Martin Luther King Jr. Boulevard, where the firm plans to build a five-story, 286-unit multifamily project.
Westfield is nearing completion on 168 units at the Stanley House in Aurora just south of Stanley Marketplace.
Plans were recently submitted to the Denver planning department for Aster Conservatory Green Phase 3 on the block between 45th and 46th avenues and Willow and Xenia streets. The owner is listed as Brookfield Properties.