Denver apartment development booming despite signs of slowdown,

Despite warning signs that some tight twists and turns are on the road ahead, metro Denver’s apartment developers aren’t applying the brakes. If anything, they remain firmly on the accelerator. As more forecasts call for an economic slowdown, if not a full-blown recession, later this year or next, apartment construction continues to drive forward at full throttle, leaving onlookers like Cary Bruteig, owner of Apartment Insights in Denver, concerned. “We will continue to start projects with 10,000 to 12,000 units a year until it is crystal clear things are headed down,” said Bruteig. “When we have a recession, it will definitely hurt.” Developers had 26,916 apartments under construction across metro Denver at the end of last year, according to his counts. Beyond those, another 25,686 are in the planning stages. The region added 12,324 new apartments last year and 13,348 the year before, according to the Denver Metro Apartment Association. To put that in perspective, over the past three decades, the number of new units added in metro Denver has averaged 4,534 a year. If there is a downturn, developers might come out the other side hands sweating, hearts pounding and mostly unharmed. But the sheer volume of new apartments underway, and the difficulty in changing course, suggests many projects may go over the edge of the cliff. So far, tenants have snapped up the huge surge in new supply, confounding predictions of a saturated market. Companies continue to add jobs here, and young adults continue to move to the Front Range to fill those jobs. Plus, a lot of native millennials still live with family, leaving another pent-up base of demand. Last year, metro Denver tenants absorbed 13,707 units, more than the number constructed, according to the Denver Metro Apartment Association. Bruteig acknowledges that some developers who pulled back in 2016 are kicking themselves for getting out too early. But a correction will come at some point, he adds. (Denver Post)