Welcome to Denver, CO
Why Denver?
Denver has seen above average job and population growth every year since the Great Recession, and as a result the city has experienced above average rent growth and occupancy rates nearly every year as well. Even throughout the COVID-19 pandemic, the Denver MSA has fared well, outperforming national averages in both collections and occupancy across all property classes.
Median Age
With Bachelor’s Degree or Higher
Unemployment Rate
Newer Class A properties have performed particularly well, as these types of assets attract residents with higher, more resilient incomes that are more apt to handle potential financial duress. Furthermore, Denver’s unemployment rate pre-COVID was 2.3% and today stands at 4.8%. Denver is also home to more college students per capita than any other city in the US, with the exception of Boston, making it a very attractive option for employers looking to relocate or expand but in need of a broad and deep highly educated work force. 48% of the population in Denver has a Bachelor’s degree or higher, and Denver boasts one of the youngest populations of any major city in the nation, with a median age of 36.
Median Household Income
Average Home Price
Home Ownership Rate
State Income Tax Rate
Median household incomes are also very strong at nearly $80,000/year. However, the average home price reached $687,768 in August 2021 – a 14.3% year-over-year increase – which explains the steep discount in the cost to rent in the city relative to the cost to own. This makes it hard for even the well-educated and high-income millennials and Gen Zers to be able to afford a home – particularly in an urban neighborhood that’s appealing to them.
Denver’s home ownership rate currently stands at 49.9% according to the Census Bureau vs. an average of roughly 65% across the US. Current supply/demand fundamentals are also compelling in Denver – with deliveries of new units anticipated to fall short of demand by 3,400 units over the next 5 years.
Population and job growth continue to outpace apartment and single-family construction in Denver. In addition, because Colorado has a state income tax rate of 4.55%, residential property taxes are exceptionally low with an average effective tax rate of just 0.51% - the third lowest in the country and less than half the national average. In Denver they average just 0.54%, or ~30% of what they are in Texas, which directly and materially increases NOI and therefore gross margins and IRRs/multiples on multifamily development projects. Denver also benefits from an increasingly diverse economy and an exceptionally high quality of life.