CBRE has released Q1 2024 figures for the Denver retail and multifamily markets. The retail sector continues to perform, posting tightening vacancy and rising rents, while multifamily occupancy and rents decreased quarter-over-quarter. However, the decrease was largely due to the seasonal nature of leasing and is not an indicator of softening fundamentals. Rent growth remained positive year-over-year, a great sign especially for the first quarter, during a time of record deliveries.
‒ Q1 2024 posted just over 356,000 sq. ft. of positive net absorption, a sharp increase from the 52,000 sq. ft. in the previous quarter and an increase of 3.6% year-over-year.
‒ Direct vacancy decreased 20 basis points (bps) quarter-over-quarter to 5.7%, while the total availability rate increased 30 bps to 6.2%.
‒ The direct average asking rent in metro Denver saw a slight 1.5% increase quarter-over-quarter to $20.95 per sq. ft. NNN.
‒ The construction pipeline saw approximately 400,000 sq. ft. under construction in Q1 2024. Four projects totaling just over 134,000 sq. ft. delivered this quarter, a sizable 703.9% increase quarter-over-quarter from the 16,000 sq. ft. that delivered in Q4 2023, but a 32.1% decrease year-over-year.
‒ Sales volume totaled $182.3 million in the first quarter of 2024, a 16.6% decrease quarter-over-quarter and a more moderate decrease of 7.3% year-over-year.
Denver Multifamily Figures Q1 2024
‒ The overall occupancy rate decreased 30 basis points to 93.9% in Q1 2024. The historical Q1 occupancy from 2000-2019 averaged 93.7%.
‒ The average effective rent decreased to $1,891 per unit or $2.17 per square foot (sq. ft.), down approximately $14 per unit quarter-over-quarter but up $8 per unit year-over-year.
‒ Development activity appears to have peaked with a high volume of deliveries and few new starts. At the end of Q1 2024, there were 33,185 units under construction across 128 communities.
‒ Completions remained elevated with 3,156 new units that delivered this quarter. Deliveries are expected to remain elevated through 2024 as many developments are nearing completion.
‒ Net absorption was positive 2,546 units in Q1 2024. Demand remained strong as metro Denver recorded the third highest Q1 2024 net absorption across all markets in the U.S.
‒ Q1 2024 transaction volume totaled $1.0 billion, an increase of 2.4% quarter-over-quarter and a significant increase of 72.5% year-over-year. While transaction volume is experiencing an uptick, the first quarter’s performance was 32.4% below the pre-pandemic Q1 average.
