— By Adam Riddle of MMG Real Estate Advisors —
After a difficult stretch, Denver’s rental market is showing signs of relief. Absorption picked up sharply in the second quarter, with renters absorbing more new apartments than developers delivered. This is the first time that’s happened on a trailing 12-month basis since late 2021. It’s a meaningful shift after two years defined by heavy construction and soft pricing.
The supply wave that pressured the market is receding. New deliveries are down nearly 40 percent from a year ago, and the number of units still under construction has shrunk to less than 4 percent of existing inventory, well below the 2023 high of around 11 percent. A handful of submarkets, particularly Englewood/Littleton, still carry a sizable pipeline worth watching, but for most of the metro, the worst of the construction overhang appears to be behind it.
Rent trends have been the last piece to catch up. Average effective rents are still down from a year ago, a lingering effect of the concessions landlords leaned on to fill units during the delivery wave. Thankfully, the quarterly trend has turned positive for two straight quarters now. Occupancy is climbing too, albeit gradually. Taken together, the data suggest the market has bottomed and is beginning to recover, with pricing power starting to return.
The depth of demand underneath the numbers also supports the recovery. Colorado led the nation in Millennial in-migration in 2024, the most recent year of available data, and the metro’s economy continues to diversify in ways that support steady renter demand. Technology remains a major growth engine, with a workforce approaching 130,000 and continued expansion from major employers. Aerospace has emerged as another strength, and healthcare institutions across the metro remain a consistent demand driver.
The metro is also benefiting from a wave of major developments. With Burnham Yard, Cherry Creek West and the Fox Park redevelopment project in active construction or recently announced, the metro could sustain elevated construction employment for years. This would support renter demand even as the broader delivery pipeline thins. Each project also adds new office, hospitality and entertainment jobs, while new infrastructure projects like Wynkoop Crossing continue to enhance the city’s connectivity. Together, these projects could support demand beyond the current cycle.
Overall, the setup heading into next year is improving. The demand is there, the supply pressure is easing and pricing power should follow as the remaining lease-up inventory gets absorbed. Denver isn’t out of its correction yet, but the balance between supply and demand is improving.
— By Adam Riddle, Managing Director, MMG Real Estate Advisors. This article was originally published in the September 2026 issue of Western Real Estate Business.