Coming into 2026, commercial brokers are seeing an apartment market in Denver that’s looking overbuilt, with a higher vacancy rate and falling rents. But not all investors are shunning the apartment projects coming available now.

The oversupply follows a flood of new inventory to the market from projects started during the global pandemic, when those looked optimal to investors, as well as from a trend of office buildings, also suffering from higher vacancies, being repurposed into residential projects.

While the supply continues growing by thousands of units from newly completed apartments, vacancies market-wide are running into the 6% and 7% range, up around a percent from 2024, the highest in a decade. Average rents have remained steady or fallen slightly in tandem.

But a London-based asset company is taking a longer view of the Denver area market and is seeing some better fundamentals here.

L&G Asset Management, which traces its roots to the New Law Life Assurance Society, founded in 1836 and which grew to become one of Britain’s largest insurers, has spent $180 million on apartments in outlying Denver areas just over the past few months. L&G now boasts $1.533 trillion in global assets.

Two weeks ago, L&G’s U.S. acquisitions group announced it had purchased a newer, 300-unit apartment off Chambers Road at the E470 beltway in Parker for a reported $97.2 million. That followed a purchase by L&G in November of a 177-unit apartment across U.S. 6 from the Jefferson County Courthouse in Golden, for a reported $82 million.

Although brokers see the Denver area as overbuilt — still absorbing projects launched four years ago — investors are finding potential in some select commuter niches like this.

“Our preference is for submarkets with limited supply in our chosen regions, which made Golden and Parker especially attractive options for our firm,” Tim Watson, L&G’s head of investment and portfolio for U.S. holdings, told The Denver Gazette. 

“Although a significant amount of new supply has recently entered the market, it should be noted that record absorption levels of construction starts have been observed,” Watson continued. 

“The underlying fundamentals in the Denver area continue to be strong, which supports our long-term capital strategy.”

Mitch Trevey, managing director of Trevey Commercial Real Estate in Parker and a specialist in apartment project sales, said that properties in outlying areas like Parker and Golden may be looking favorable now for their fundamental demographics.

“There is overbuilding in the multifamily market across the board, from Lone Tree to Highlands Ranch to downtown,” Trevey told The Denver Gazette.

But the suburbs, he added, may contrast favorably to core-city properties, at a time when downtown Denver is still struggling with problems that grew from the pandemic.

“Compounding that are office buildings getting converted to multifamily projects,” Trevey said. “Downtown has a huge amount of inventory.”

Trevey said that renters in outlying commuter areas reflect a new breed of post-pandemic resident that could make for a better absorption prospect than those that downtown properties are seeing now.

“The next generations don’t see value in having a home as an investment; they’re happy just to live somewhere cool,” Trevey said.  “They don’t necessarily want to own.”

MULTIFAMILY DEMAND

“Demand for multifamily has remained stronger in the suburbs,” Trevey said, adding that although downtown continues to have attractive amenities, those may not appear as alluring today as the access to trails and open space that suburban projects may have.

“People were paying crazy money for (downtown) 10 years ago, but after the virus, nobody wanted to live in downtown,” Trevey said.

“Downtown could see a comeback,” Trevey added, noting that the reopening of 16th Street and other reinvestment efforts are promising. “But until then, values for those properties have dropped, and I’m not sure when they will come back. You have to want to be there, but in the suburbs that’s not as big an issue.”

“There’s a difference between urban living in Parker and in downtown,” Andrew Hamrick, senior vice president and general counsel to the Apartment Association of Metro Denver, told The Denver Gazette in light of the two large multifamly sales.

“The runup in inventory in the city has kept (rental) prices flat. That segment has seen the most growth, so it’s not surprising that it is the weakest,” he said.

L&G’s Golden acquisition was for Outlook Golden Ridge, on Golden Ridge Road two miles south of the town’s historic Washington Avenue. Completed in 2015, it delivers one-and-two-bedroom units along with a fitness center, pool, hot tub, a “sky deck” and outdoor common areas. Homes there show as lying around a 20-to-25-minute commute from downtown Denver.

L&G said that it intends to rename the property “The View at Golden Ridge.” Commercial brokers from CBRE handled the transaction.

The Parker acquisition was for The Alder, just west of Chambers Road at E470. The website for the 300-unit property, purchased from a multifamily division of homebuilder Century Communities, reports offering a resort-style pool with a 25-yard lap lane and a spa, along with a fitness center, yoga studio, outdoor kitchen, coworking spaces, and a coffee bar.

But broker Trevey, who wasn’t involved in the sale but said his firm dominates the commercial and land acquisitions in the Parker area, suggests that the commuter advantages of those two properties may be as appealing to investors as any onsite amenity.

BUY-VS-RENT

“The location is probably one of the biggest pluses,” Trevey said. “How many exits on 470 do you want to drive past?”

Although those renters may well take a different look at apartment life after they have kids and they find that the size aspects don’t work as well, Trevey adds that apartment demand is also being supplemented by senior-aged renters.

“They’re done raising kids and are asking, ‘Where can we go?’  They don’t necessarily need to own either.”

Trevey cites another factor that may make the supply-demand picture of suburban apartment projects more appealing to large investors now — opposition to multifamily projects by suburban governments, despite their popularity with consumers.

Town councils don’t want more apartments, Trevey said, adding that he sees the anti-multifamily phenomenon occurring in towns across the south metropolitan suburbs.

“I don’t lease apartments, but I sell them to developers,” Trevey said. “I would rather see for-sale projects, but as for residents, it’s their decision whether they want to buy or rent. The question is whether you’re making a mortgage payment or paying rent.

“It comes down to consumer demand, like the electric vehicle thing. You can’t tell people what they need to be driving. What you’re seeing is demand from residents on where they prefer to live.”