Which Denver cap rate is being quoted?
A cap rate divides annual net operating income by price before debt. Here the statistic’s meaning matters more than choosing the newest or highest number.
On narrow screens, swipe tables sideways to read all columns.
| Measure / period | Cap | Meaning and limit |
|---|---|---|
| Matthews publisher benchmark Q2 2026 | 5.36% | Publisher-reported cap; statistic definition not supplied. Cap sample size, weighting, cohort and NOI convention undisclosed; not a statewide series. |
| Publisher market-cap series 2026 series as of October 12, 2026 | 5.50% | CoStar market series, displayed separately from the broker's sale average; public calculation method not independently established. The page mixes a completed-transactions heading with a market-cap chart; do not interpret this series as its sale mean. |
| Reported YTD sale-average cap 2026 YTD as of October 12, 2026 | 6.60% | Publisher-labeled average on completed-sale section. Cap sample, weighting and underlying NOI convention undisclosed; not a matched comparison to Q2 or to the market series. |
Read the methods alongside the numbers; they do not form an investable range. No basis-point trend is calculated across incompatible periods or cohorts. A sale price per unit cannot supply missing sale NOI. Broker research has commercial interests.
What changes a Denver apartment's income?
| Measure | Value / period | What it can establish |
|---|---|---|
| CBRE occupancy | 94.4% Q2 2026 | +110 bps quarterly, −20 bps annually. Occupancy, not a cap or a collections ratio. |
| CBRE average monthly rent | $1,764 Q2 2026 | +1.9% quarterly, −5.5% annually. Positive quarterly change does not erase the annual decline. |
| Yardi advertised monthly rent | $1,850 July 2026 | +0.2% trailing-three-month change; −3.6% annual. Separate inventory and rent definition from CBRE. |
| Yardi occupancy | 93.5% June 2026 | Not reconciled to CBRE's 94.4%; do not subtract them as a monthly trend. |
Downtown and the Ball Arena district: approval has a different clock from lease-up
Observed: Yardi's September report describes approval of Wynkoop Crossing within the Ball Arena redevelopment's initial phase, including residential space. It also records substantial metro construction through July.
A district plan can improve eventual access while existing apartments are still competing for renters. Paying now for a future amenity and assuming an immediate reduction in concessions counts the same optimistic story twice.
RentalCalcs interpretation: Treat the district benefit as conditional. A current downtown acquisition needs a dated inventory of units available for the subject's lease-expiration months, rather than all approved redevelopment homes entered as next year's completions.
Evidence that would change the view and documents to obtain
Funded starts, a documented opening schedule and signed leases without repeated incentives would strengthen the recovery thesis. Delays may move competition into the refinance year rather than remove it.
Next: Obtain the project's permit/start status and delivery schedule; ask competing buildings for move-in availability and full lease consideration. Separate approval, construction, opening and stabilized occupancy in the worksheet.
Aurora versus Denver: compare the apartment first, then identify its regulator
Observed: The public pricing sources label their geography Denver, while the official rental-license program explicitly applies within the City and County of Denver. Aurora is a separate municipality; no Aurora-specific sale-cap cohort is established here.
A metro search can place unlike buildings in one comparable set. Jurisdiction, utility responsibility and remaining equipment life can change the buyer's recurring income and initial cash even when the advertised cap is identical.
RentalCalcs interpretation: Do not assign Denver's license requirements or a metro cap automatically to an Aurora address. For a smaller acquisition, the gain from finding an omitted utility or repair line may matter more than the second decimal of a broker benchmark.
Evidence that would change the view and documents to obtain
Verified municipal boundaries, clean operating records and sale-income reconciliations for similar nearby buildings would reduce this uncertainty. A postal label or seller expense ratio alone would not.
Next: Verify municipality and county from the parcel record. Obtain the applicable rental approvals, legal unit count, meter map, owner utility bills and component inspection. Keep recurring maintenance outside initial capital work.
Sources: City and County of Denver — residential rental property Innovate Commercial Real Estate — Denver multifamily
Stabilized older apartments versus recent lease-ups: collected rent controls the recovery
Observed: CBRE's Q2 rent improves quarterly while remaining below the prior year. Yardi's later advertised-rent series also remains down annually. Their inventory differences prevent a precise combined trend.
A face-rent increase may be offset by free months or renewal incentives. An older building can also face costs that a newer property's seller statement does not reveal. Neither vintage guarantees a cap premium or discount.
RentalCalcs interpretation: Use demonstrated receipts as the base and test the concession calendar separately. Do not reduce vacancy, remove free rent and add asking-rent growth simultaneously unless the property records support all three changes.
Evidence that would change the view and documents to obtain
Concession-free renewals with steady collections and funded repairs support stabilization. Growing arrears or repeat promotions weaken it even if physical occupancy rises.
Next: Request monthly rent rolls, concessions, receipts and turn invoices for a trailing year. Match competing units by bedrooms, condition and utility charges; inspect roofs and mechanical systems before pricing an exit.
Sources: CBRE — Denver Multifamily Figures Q2 2026 Yardi Matrix — Denver, September 2026
Where the evidence stops
| Area / product | Available | Still needed |
|---|---|---|
| Publisher Denver markets | Dated cap measures and separate operating inventories | Exact CBSA crosswalk, cap-reporting sample, weighting and consistent NOI normalization |
| Downtown / Ball Arena leasing catchment | Dated redevelopment context | Matched neighborhood cap cohort and verified project-by-project opening calendar |
| Aurora, Lakewood and other municipalities | Regional context only | Municipal sale-cap samples, parcel jurisdiction and subject costs |
| Small buildings, regulated and student housing | Property diligence framework | Comparable product-specific sale NOI; no automatic transfer from conventional apartment averages |
The Denver County cap-rate screening tool retains its distinct modeled methodology. The Colorado county directory helps identify geographic context; neither establishes a matched apartment sale cap. This report complements the Colorado research report.
What would support compression, stability or expansion?
Matthews provides an earlier pricing reference with important statistical fields undisclosed. Innovate's CoStar series separates its market series from reported sales; different periods and selection can explain a gap without proving market expansion. CBRE and Yardi add operating perspectives, but their rent and occupancy measures should remain intact. Yardi supplies a distinct provider; several brokerage logos alone do not establish independence. The practical base is income-led stabilization, conditional on receipts rather than the disappearance of all construction.
Publisher outlook: Yardi describes a market rebalancing while supply continues to weigh on annual rents. Innovate publishes CoStar/Oxford Economics projections separately from current observations. Those projections are not adopted as a RentalCalcs cap forecast or as the acquisition's growth assumption.
Compression
Delivered apartments fill without recurring incentives, and financed comparable sales support higher prices per dollar of documented buyer NOI.
Watch: Renewal receipts after incentives and consistent closed-sale income.
Invalidation: Apparent rent gains depend on free periods or lower caps reflect a different asset cohort.
Underwrite: Keep a lower exit yield as upside until both operating and sales evidence support it.
Stabilization
Leasing absorbs delivered stock, but buyer expenses and debt costs limit repricing.
Watch: Collected rent, concessions, utility bills and lender sizing.
Invalidation: Annual receipts deteriorate despite stronger physical occupancy, or matched sales establish a new pricing level.
Underwrite: Test an unchanged exit cap and fund initial work separately from recurring repairs.
Expansion
Concessions persist and buyer costs consume the income recovery, requiring more yield or less leverage.
Watch: Repeated promotions, arrears, repair bids and the actual lending spread.
Invalidation: Durable collections and comparable financed bids support the same income at lower yields.
Underwrite: Combine a lower NOI with a wider exit and carry additional cash through a delayed sale.
These are conditional editorial cases with no assigned probability or cap target. Policy rates do not equal the quoted property loan rate.
Can concessions consume the leasing recovery?
The same hypothetical acquisition below earns $175,000 annual NOI at a 7.00% entry cap. Six renewals with one free month at $1,600 each would remove $9,600 from a budget that assumed those months were fully paid. This incremental stress is applied after the baseline 8% loss; do not add it if the baseline already includes those exact concessions.
Six free months across six renewals
- Match Denver's statisticChoose sale income, publisher benchmark or market series; record period, inventory and missing fields.
- Build the lease calendarSeparate delivered competitors from approvals; reconcile incentives and renewals to receipts.
- Price buyer incomeDeduct quoted costs, fund work, then test debt and a lower-income/wider-exit case.
| Scenario | NOI | Exit cap | Gross value |
|---|---|---|---|
| Baseline income, unchanged cap | $175,000 | 7.00% | $2,500,000 |
| Concession miss, unchanged cap | $165,400 | 7.00% | $2,362,857 |
| Concession miss and wider exit | $165,400 | 8.00% | $2,067,500 |
Hypothetical assumptions. NOI change is cumulative over your chosen holding period, not an annual growth rate. Results exclude debt, sale costs, taxes and interim cash flow.
Starting value $2,500,000
Exit value $2,187,500 (-12.5%)
$175,000 starting NOI at 7% → $175,000 exit NOI at 8%. NOI must change by 14.3% to preserve starting value at this exit cap rate.
| Total NOI change | 6.50% exit | 7.00% exit | 7.50% exit | 8.00% exit |
|---|---|---|---|---|
| -10% | -3.1% | -10.0% | -16.0% | -21.3% |
| 0% | 7.7% | 0.0% | -6.7% | -12.5% |
| 10% | 18.5% | 10.0% | 2.7% | -3.7% |
| 20% | 29.2% | 20.0% | 12.0% | 5.0% |
Fixed table stays unchanged when the tool is edited. These are assumptions, not forecasts. Growth is cumulative over the chosen hold, not annual. Formula: value = annual NOI ÷ (cap ÷ 100). A 100-basis-point move changes the denominator by one percentage point.
Reconcile the buyer's income, debt and cash
Illustrative 20-unit acquisition: $2,500,000 price and $1,600 monthly rent per unit. Every budget input is a hypothetical assumption, not a property quote or local average. Six renewals with one free month at $1,600 each would remove $9,600 from a budget that assumed those months were fully paid. This incremental stress is applied after the baseline 8% loss; do not add it if the baseline already includes those exact concessions.
| Income or expense | Amount | Treatment |
|---|---|---|
| Scheduled income | $384,000 | 20 × $1,600 × 12 |
| Vacancy / collection loss | -$30,720 | 8% combined allowance; avoid double-counting concessions |
| Effective income | $353,280 | Before recurring expenses |
| Buyer property taxes | $40,000 | Illustrative; obtain buyer parcel estimate |
| Commercial insurance | $20,000 | Illustrative; binding quote and deductible required |
| Management | $17,664 | 5% of effective income |
| Recurring repairs | $32,000 | Separate from initial replacements |
| Owner utilities | $36,000 | Check meters and recovery leases |
| Administration and contracts | $32,616 | Itemize payroll, licensing and service contracts |
| Total recurring expenses | $178,280 | Sum of the recurring cost rows |
| Net operating income | $175,000 | Effective income minus recurring costs; before debt |
| Replacement reserve | $12,000 | Below NOI in this example |
| Annual debt service | $104,291 | $1,375,000 loan; assumed 6.5%; 30-year monthly amortization |
| Cash after debt and reserve | $58,709 | Before income tax and distributions |
Buyer cost checks: Use the assessor for the actual county and acquisition year, with the relevant assessed value, classification and district levies. A statewide assessment ratio is not a tax rate and the seller's tax line is not automatically the buyer's.
Obtain commercial insurance terms, deductibles and exclusions, utility responsibility, inspection and funded replacement work. Within Denver city, verify the rental license and ownership-change steps with the official program; other municipalities require their own check.
The 55.0% loan-to-price assumption is not a lender offer. Down payment $1,125,000 + closing costs $75,000 + initial work $150,000 = $1,350,000 invested cash.
| Metric | Result |
|---|---|
| Going-in cap | 7.00% |
| DSCR before / after reserves | 1.68× / 1.56× |
| Debt yield before reserves | 12.73% |
| Cash-on-cash after debt and reserves | 4.35% |
Initial capital work is separate from recurring repairs. NOI divided by price plus initial work gives 6.60% yield on cost, excluding closing costs. It is a different denominator from going-in cap.
Original collected-income stress: An incremental loss of $9,600 collected annual income reduces NOI to $165,400, cash after debt/reserves to $49,109, and gross value by $137,143 at the same 7.00% cap. This is the same concession miss tested above, not an additional cumulative loss.
Including both closing and initial work, total acquisition cost is $2,725,000 and unlevered NOI yield on that cost is 6.42%. This is before future carrying costs or overruns and assumes no initial reserve deposit. Add any lender-required deposit to invested cash.
Verify Colorado tax guidance and the parcel assessor and Denver’s rental program before replacing assumptions. They are diligence resources, not cost quotes.
Core analysis is free. Assumptions do not transfer to the linked calculator; enter and verify them there. A link click is separate from a completed analysis.
Take the evidence request to the property
Why do Denver cap-rate sources disagree?
A reported sale average, a market model and an earlier publisher benchmark can have different properties, periods and NOI. The table preserves those distinctions; their spread is not a measured neighborhood premium or a like-for-like change.
Does a lower vacancy rate justify a lower exit cap?
Only conditionally. Check receipts after concessions and fully priced buyer expenses, then examine matched financed sales. Physical occupancy cannot establish collectible income or a guaranteed exit multiple.
Can the metro benchmark price a Denver duplex?
No automatic transfer is supported. A duplex can compete with owner-occupants and use different debt and operating conventions. Build the smaller property's own budget and comparable sale set.
Open the free Denver worksheet
Includes a lease-expiration and concession log, source-basis comparison, buyer budget and the same reconciled reference. Entries stay in the open page; print or save to PDF before closing. No automatic saving or account is required.
Sources, lineage and refresh
Access and substantive review: October 19, 2026. Observation periods and publication dates remain separate. The older Matthews observation is explicitly bound to colorado-2026-10-19-v1, observation colorado-2026-10-19-v1-cap-1; it was rechecked, not silently refreshed.
- Matthews — Denver Q2 multifamily
Q2 2026. Published: 2026-08-13. Cap sample size, weighting, cohort and NOI convention undisclosed; not a statewide series. Underlying provider not identified in the public article; no independence claim. Recheck next edition or methodological clarification.
- Innovate Commercial Real Estate — Denver multifamily
Geography / scope: Publisher Denver market, multifamily inventory; CBSA crosswalk not supplied. Period: October 12, 2026 snapshot; 2026 YTD sales and annual market series separately labeled. Published: Publication day not stated; snapshot date shown.
Provider: CoStar; forecasts CoStar/Oxford Economics. Method / limitations: Market series and publisher-labeled sale average kept separate; market-series method not independently established. Cap sample, weighting and NOI not disclosed. Public chart's completed-transactions heading is ambiguous; no claim its market series is a transaction mean.
Refresh: Next dated snapshot, methodology clarification or source correction. Accessed and reviewed October 19, 2026.
- CBRE — Denver Multifamily Figures Q2 2026
Geography / scope: Publisher Denver apartment market, not verified identical to CBSA. Period: Q2 2026; quarter and annual comparators separately labeled. Published: July 21, 2026.
Provider: CBRE research; public summary does not fully identify underlying operating inventory. Method / limitations: Operating occupancy and average rent; not cap observations. Public summary does not disclose sample count or weighting. NOI not applicable. Differences from Yardi remain unresolved.
Refresh: Q3 figures or inventory revision. Accessed and reviewed October 19, 2026.
- Yardi Matrix — Denver, September 2026
Geography / scope: Publisher Denver market; surveyed apartment inventory, not every small building. Period: Rent through July 2026; occupancy June; redevelopment context September edition. Published: September 23, 2026.
Provider: Yardi Matrix; employment separately BLS. Method / limitations: Public two-page sample, page 2 visually reviewed. Advertised rent and occupancy, not collected subject rent or cap. Full inventory weighting not supplied in sample; NOI not applicable. Full gated report not accessed.
Refresh: Next Denver edition or project status change. Accessed and reviewed October 19, 2026.
- City and County of Denver — residential rental property
Geography / scope: City and County of Denver only. Period: Current guidance accessed October 19, 2026. Published: Page publication day not stated.
Provider: Official municipal licensing program. Method / limitations: Official licensing scope and ownership notification resources, not a metro rule or expense quote. Cap/NOI/sample/weighting not applicable. Check exceptions and current procedure for the subject.
Refresh: Program amendment or ownership transfer. Accessed and reviewed October 19, 2026.
- Colorado Division of Property Taxation — property tax
Geography / scope: Colorado framework; local billing depends on parcel. Period: Current guidance accessed October 19, 2026. Published: Not stated.
Provider: Official state guidance; county assessor establishes parcel evidence. Method / limitations: Diligence entry point; no numerical tax, valuation or insurance quote adopted. Cap/NOI/sample/weighting not applicable.
Refresh: Tax-year or assessment change. Accessed and reviewed October 19, 2026.
Limited facts summarized; proprietary reports and graphics are not redistributed. On a new edition, review narrative, benchmarks, calculator defaults and generated worksheet together. Builds alone do not advance review dates. Send a correction with the source and claim.