CREJ - Multifamily Properties Quarterly - May 2017
The Downtown Denver Partnership’s 2017 State of Downtown Denver report allows us to dive deeper into one market segment to better understand the supply-and-demand balance. Since 2000, the residential population of downtown Denver has tripled, according the report. A total of 79,367 people live in downtown Denver and the city center neighborhoods. The city averages 15,000 new residents per year, making it one of the fastest-growing large cities in the country. In an attempt to keep up with this population growth, 3,817 additional residential units were completed between 2014 and mid-2017 in the downtown area, which was estimated to support 4,499 new residents. There are an additional 5,341 residential units in the pipeline, which will support 6,295 new residents once completed, according to the report. Denver will need to keep a steady development pace even after these apartments are completed to accommodate the expected continued growth in the city center. By 2022, the report predicts that the population of downtown Denver will be 24,408, and the surrounding city center neighborhood will see a population of 87,345, which would represent a 56 percent growth rate from 2000 to 2022. These downtown residents largely comprise nonfamily, white households, with an average size of 1.42 people. Males outnumber females, 56.2 to 43.8 percent, and the average age is 34.3 years old. The downtown population’s average household income is $113,565 and 44 percent have a bachelor’s degree. These statistics are important, especially when you consider that the average rent for a one-bedroom apartment in downtown Denver is $1,574. Obviously, the job market is crucial to maintaining a healthy multifamily market. Denver’s unemployment rate is 2.7 percent, metrowide. For comparison sake, the nationwide rate is 4.5 percent. This can be a double-edged sword when weighing the long-term vitality of Denver’s in-migration as it becomes more difficult to find employment – time will tell how the market handles it. Multifamily activity remains strong across the state, not just in Denver. This most recently was demonstrated by the record-breaking sale of Boulder’s 17*Walnut, which sold for $600,000 per unit, or $654 per square foot. Within this issue, you’ll read about the market’s solid fundamentals as well as a few areas to keep an eye on regarding affordability, condominium development, tax issues and regulatory challenges. As always, thanks for reading. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104