Colorado-Real-Estate-Journal_491633

A s we move through the fourth quarter of 2025, the Denver multifamily market has proven to be a land- scape of clear distinctions, bifurcated by the “haves and have- nots,” where well-positioned assets garner significant attention while others face headwinds. Year-to-date transaction volume has surpassed $2 billion in the metro area, dem- onstrating stable liquidity despite prolonged price discovery. While challenges from new supply and legislative uncertainty remain, Den- ver’s key demand drivers continue to create compelling opportunities. For investors who can navigate this divided market, the path forward is paved with potential for near-term yield, attractive basis and long-term growth within every segment of the multifamily space. n The current landscape. The “haves” are assets with distinct advantages: well- located, positive in-place opera- tions, limited com- petitive submarket supply, strong in-place resident demographics and assets offered at significant discount to replacement cost. These are some of the key factors that help create a compel- ling acquisition thesis for internal investment committees today. Assets that check many of these boxes continue to see 30-plus prop- erty tours during a normal market- ing campaign and 10 to 15 offers in most instances. Within this distinct segment of the market, our team has consistently seen roughly 3% price movement from initial bid to final offers, with final pricing being within or above original market guidance, demonstrating a very nar- row bid-ask spread. The “have-nots” face more chal- lenging conditions. Denver’s cen- tral business district and other high-supply submarkets remain challenged by an influx of new deliveries, which has led to softer fundamentals and elevated conces- sion levels. However, significant dis- count-to-replacement-cost invest- ment opportunities exist in today’s market, albeit with lower going-in yield given operational challenges. Older vintage properties built in the 1970s and 1980s are still garnering investment activity, but at a higher cap rate compared with 1990s and newer value-add deals. Location continues to be a critical compo- nent for the relevant buyer pool as it relates to future rental upside potential within the value-add seg- ment of the market. n Why Denver in today’s market? Despite supply challenges and legislative uncertainty, Denver’s core demand drivers continue to fuel investment activity. The primary catalyst is the widening gap between renting and owner- ship costs. This disparity creates a “sticky” renter base and places sus- tained upward pressure on rental rates over the long term. Addition- INSIDE Developers and investors look to position assets to capture the next wave of demand Market demand Filling the “missing-middle” gap has led to the creation of programs at the federal and local Affordable housing PAGES 21-25 Filling the “missing-middle” gap has led to programs at the federal and local levels Design, branding PAGE 19 November 2025 PAGE 6 Please see Gallman, Page 8 Seth Gallman Associate, JLL Capital Markets Navigating Denver’s bifurcated market into 2026