Craig Stack
Senior vice president, multifamily investments, Colliers International
The cost of construction continues to climb around the Denver metro area, constraining development of for-sale housing and limiting most new apartment construction to the luxury space. The overall housing shortage persists, making entry-level homeownership elusive with median home prices soaring into the mid-$400,000 price range.
Companies are having a hard time filling positions due to the low unemployment, which is drawing more residents from other states to fill these jobs. Residents new to the state often seek to be close to their jobs, amenities and/or transportation. Based on this convergence of events, we’ve identified three submarkets that should prove enticing to incoming residents due to their relatively low rents, compared with the metropolitan statistical area, and their proximity to employment, transportation and amenities.
Bill Morkes
Vice president, multifamily investments, Colliers International
Investors seeking rent growth to improve investment returns and achieve future appreciation also may want to key in on these markets. In addition to having some of the lowest average metro rents, these three submarkets also have some of the lowest vacancies and lowest levels of new apartment construction in the metro area, according to data provided by Yardi Matrix as of June. This mix of attractive metrics should prove a winning combination for owners and investors in these submarkets.
For comparison we’ve provided a few key overall Denver MSA statistics:
- Average rent: $1,519 per month
- Average occupancy: 95 percent for stabilized units
- Total under construction: 30,000 units
Aurora-West central Courtesy Yardi Matrix
Aurora-West central
- Approximate boundaries: Lowry to the west, Mississippi to the south, Buckley Air Force Base to the east and Interstate 70 to the north
- Average rent: $1,243 per month (82 percent of Denver MSA)
- Average occupancy: 95.1 percent for stabilized units
- Total units under construction: 497 units
With average rents that are $276 below the metro average and the recent completion of the Aurora light-rail line, this area will draw residents looking to live in close proximity to the expanding job centers nearby. Aurora Medical Centers, Denver International Airport, Anschutz Medical Center, I/70-airport corridor industrial centers and The Gaylord Hotels are just a few of the nearby employment hubs adding jobs. High municipal impact fees and expensive architectural requirements have kept new construction in check.
Wheat Ridge
Courtesy Yardi Matrix
Wheat Ridge
- Approximate boundaries: I-70 to the west and north, 26th Avenue to the south and Sheridan Boulevard to the east
- Average rent: $1,235 per month (81 percent of Denver MSA)
- Average occupancy: 96.5 percent for stabilized units
- Total units under construction: 595 units
Sandwiched between the rapidly developing West Highlands, Sloan’s Lake, Berkley and Regis submarkets, residents have rediscovered this well-located community. The 38th Avenue redevelopment corridor, also known as Wheat Ridge’s Main Street, is becoming a regional draw for trendy new retail and restaurants. The G line light rail is anticipated to be complete soon, providing residents an easy commute to downtown Denver.
Northglenn/Thornton
Courtesy Yardi Matrix
Northglenn/Thornton
- Approximate boundaries: Federal Boulevard to the west, 144th Avenue to the north, 26th Avenue to the south and Sheridan Boulevard to the east
- Average rent: $1,378 per month (91 percent of Denver MSA)
- Average occupancy: 94.6 percent for stabilized units
- Total units under construction: 600 units
The Interstate 25 north corridor has seen rapid growth in retail, medical and other business sectors including the Amazon distribution center, which recently announced the hiring of 1,500 employees. The north light-rail line is under construction and eventually will provide residents with multiple locations to catch the train into downtown Denver.
