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Development Increasing

Dallas-Ft. Worth

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Development Increasing
Sales have caused apartment cap rates to compress to a level that makes sense for strong developers backed by capital to reenter the market. As a result, The Cantrell Co. acquired 60 acres to market in Burleson where Encore Multi-Family is building 200 units called Encore on Alsbury (rendering above), which has a mid-2011 completion, Cantrell partner Todd Franks tells us. The Cantrell site is zoned for higher-density multifamily and located at the eastern portion of what has been dubbed the Burleson West Transit Oriented Development District (see, we told you TODs  were going to the 'burbs). The City of Burleson has purchased the land for a rail station to connect Burleson to downtown Fort Worth. The four-county area of DFW saw positive absorption of more than 27k units year-to-date, according to the Apartment Locator Network; the Metroplex added 7,650 units during that same period, the net effect of which is a 3.6% increase in occupancy year-over-year.
 
Sam Pettigrew and Todd Franks
Todd, right, with colleague Sam Pettigrew, tells us the additional multifamily units puts DFW ahead of all other metros with a 10% share of the total positive year-to-date demand across the 54 largest markets. DFW has attracted institutional investors that generally stick to areas where there is a barrier to entry like the coastal states. (Water certainly would be a barrier.) DFW has already surpassed last year with year-to-date sales ending Oct. 31 at 143. If this pace continues, there will be 172 properties sold, a 27.4% increase over '09, Todd says. Most economists only predicted a 10% increase.