Do older apartments compete with new construction?

Denver Apartment Vacancy Rates

Denver Apartment Vacancy Rates

Many apartment owners have expressed a belief that their older apartment buildings won’t be affected by all of the new construction going on in Denver. Particularly, they’ve told us that they are not concerned if developers have trouble filling up the new buildings because, “My apartments don’t compete with the new stuff.” But the data suggests otherwise…

We studied Denver’s vacancy trends for the past 17 years. As the chart below demonstrates, when vacancy rates move, they move together across the metro area. Lakewood affects Aurora, large buildings affect smaller properties, and new construction will impact existing Central Denver buildings.

Certainly the magnitude may be different – newer buildings may see higher vacancy than older properties – but everybody will feel the effect if Denver overbuilds.