Rents are still falling, construction is finally cooling, and not all Denver submarkets are keeping up in the multifamily race, according to a new report.
Tenants gained more power as average rents fell again in the first quarter, marking the third consecutive quarter of decline. The metrowide average dropped to $1,823 per unit, down 1.4% from the fourth quarter and 4.1% year-over-year, according to CBRE’s first-quarter multifamily report.
That’s a 6.5% drop from the market’s Q3 2023 peak of $1,949 — and about $1,500 in annual savings for renters.
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Every unit type tracked by CBRE posted year-over-year rent declines, with one-bedrooms falling the furthest, down 4.4%. No submarket or building vintage was spared. Older properties took the worst hit, with 1970s product dropping 6.5% on average, but even buildings constructed in and after 2010 saw rents slip 3.1%.
And while landlords are dialing back rents, developers are finally dialing back deliveries.
Just 2,384 units were delivered in Q1, or less than half of the 5,055 units delivered in Q4, a historic high for the market.
That pullback helped bring supply and demand closer into balance. Net absorption reached 2,081 units, the second-highest Q1 total in a decade. The result was a relatively steady 94.2% occupancy rate, down just 10 basis points from the previous quarter but up 40 basis points year-over-year.
Still, CBRE data shows clear winners and losers when it comes to demand.
The South Denver-Englewood submarket led the metro in net absorption, with 661 units leased in Q1. North Lakewood-Wheat Ridge and the Downtown-Highlands-Lincoln Park submarkets also performed well, absorbing 468 and 533 units, respectively.
On the other end of the spectrum, north Aurora, Parker, Castle Rock, Thornton and Northglenn all posted negative absorption.
Overall, the market appears to be settling into a slower growth phase after several years of aggressive development and pricing. Rent declines may continue in the short term, especially in oversupplied or underperforming submarkets, but the Q1 pullback in construction could set the stage for more equilibrium by the end of 2025.
