DALLAS-FORT WORTH: 28,000 Apartments Too Many?
Could Texas markets be losing their luster? The number of new multifamily units under construction across the Metroplex (in the land of apartments, the futon retailer is king) may well slow lease-up when the latest batch delivers, according to the national development experts at Bisnow's fifth annual DFW Multifamily Summit. AMLI Residential has four communities in the works across DFW and EVP Taylor Bowen (above) says it seems like everyone plans to deliver in Q1 '15, which means lease-up will be more of a dogfight than the last wave of deliveries in 2011. At that time, AMLI was absorbing 40 to 50 units a month with rent increases, too. Taylor's not as optimistic this time around. Typically, rents increase 3.5%/month, but landlords may not hit that in ‘14 and '15, he says.
The Uptown apartment market has expanded beyond that 25- to 35-year-old demographic to older renters who have sold their homes and want to live in these apartments with more amenities, says Behringer SVP/chief investment officer for multifamily funds Bob Poynter (above). (It will make for much more interesting elevator conversation.) Behringer has three development deals under construction across Dallas including two with Trammell Crow Co and one in Victory Park. IPA Texas director Drew Kile says with all the new units under development, rents are a little slow to see increases. Plus, major projects like State Farm will spur support positions in retail and restaurants. Those people aren't going into the new apartments, they're moving in the Class-B and C, which is driving that space.