With more than 34,000 apartments sitting empty at the end of 2025, the Denver-area apartment market reached a vacancy rate of 7.6%, the highest in 16 years, officials with the Apartment Association of Metro Denver said Wednesday.
It’s not that apartments weren’t getting rented — newly built complexes filled up faster last year than any other year other than 2021. There were just so many new units built in the past two years that the excess supply created a large backlog. Multifamily developers have built 125,000 units in the past decade. That’s about one-third of the area’s nearly 450,000 existing units.2
“When you’ve got that number of vacant units, it doesn’t surprise me that developers and management companies have gotten very aggressive with their pricing,” said Scott Rathbun, president of Apartment Insights, which compiled the data for the association. “People lower their rents until they fill up their units. And so that’s what’s happening right now. Rents are just falling lower and lower and lower because we’ve built the market up with so many vacant units that we need to fill.”
The seven-county metro Denver area includes Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties.
Douglas County had the highest average rent of $1,950, while Adams County had the lowest, at $1,620. Arapahoe and Denver counties tied with the highest vacancy rate of 8.2%, while Boulder and Broomfield were at 6.5%.
Overall, the average rent fell 4.8%, or $88, in a year to $1,754 a month, or about the same as four years ago. And that was before any concessions — like free rent, Visa gift cards and raffles. Those reduced rents even more, with an average concession of $169 or 9.5% of gross rent. That’s an average of about four to five free weeks of rent no matter how old, new or urban the property.
“The newer properties can be offering up to three months free, which is putting downward pressure on older properties,” Rathbun said. “This is the largest concession by percentage in 19 years and the highest dollar concession in the 21-year history since Apartment Insights has been tracking the market.”
Older properties built in the 1970s and earlier are also seeing the highest vacancy rates in metro Denver, at 8.4% in the fourth quarter. Those older units also had the lowest rents metro wide, at $1,423 for apartments built in the 1970s.
Even though there’s an oversupply of apartments — officials suggested that renters will see “a favorable rental market for at least another year” — this could change quickly if new projects stall or developers abandon the local market. Right now, there are 50,000 units in the pipeline but another 20,000 have been unable to break ground and could lose the approvals to build.
“We are already seeing a shrinking in the pipelines, which means moving forward, we’re not going to be delivering as many units,” Rathbun said. “We are overbuilt right now, but we could move into a situation where we would be underbuilt moving forward.”
Still, the industry isn’t hurting just yet, unlike the commercial office market where vacant buildings have gone into foreclosure or are being sold at steep discounts. Rathbun said he’s not hearing that landlords and owners are heading into defaults or other financial trouble. The developers behind the newer properties borrowed when interest rates were low. It’s the reduction of future supply that has the industry concerned.
“The higher interest rates is part of what caused the pipeline to shrink in the first place,” Rathbun said. “AnI think we still have runway in front of us before we see distressed assets because they were able to build these things with pretty low interest rates.”
Last year, nearly all but 160 of the 14,439 completed apartments found renters, but that came after a year where 12,000 new units went unrented. There’s been an oversupply since 2022.
Finding the balance between supply and demand is near impossible, especially in the current economic environment where job growth and population growth has slowed. But as long as new supply keeps coming, that appears to be pushing down rents “naturally,” he said.
“We’re seeing right now that if you build enough market-rate housing, it solves the problem of affordable housing,” said Drew Hamrick, the association’s senior vice president of government affairs. “And when you have too many handcuffs on building affordable housing, you stymie market-rate construction.”
Developers have paused new construction, some because of new city regulations, like Denver’s Inclusionary Housing Ordinance requiring more affordable housing in each new development. Potential investors are sitting on the sidelines, said Mark T. Williams, the association’s executive vice president.
“They’re really nervous about all those unpredictable elements that are outside those natural market conditions,” Williams said. “You’ve got increasing costs, insurance, taxes, labor supplies. It’s just sort of the perfect storm right now. … It’s a great opportunity for new renters.”
This is a developing story and may be updated.