An East Coast rental housing developer has tapped a JPI development partner to accelerate its expansion into Texas.
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Virginia-based Middleburg Communities hired Aaron Douthit to build the firm’s presence in the Lone Star State and help it expand into other high-growth western markets, according to a press release shared with Bisnow. The Dallas-based new hire will help source and advance development opportunities in North Texas and as far north as Tulsa, Oklahoma.
Middleburg's choice to lean into a growth strategy during a challenging time for multifamily markets encouraged Douthit to make the move.
“They're a well-capitalized group, and the conviction that they had towards growing their platform right now, at a time when I think a lot of other developers are pulling back, was extremely encouraging to me,” Douthit told Bisnow.
U.S. apartment construction starts declined sharply during the first quarter due to elevated development expenses, high financing costs and slow rent growth, according to a report released by CoStar and Apartments.com last week. The 55,000 units that began construction during the first quarter was the nation's lowest quarterly total since 2011 and a 73% drop from the sector's 2022 peak.
In Dallas-Fort Worth, multifamily construction activity has declined for 11 straight quarters as the metro deals with an oversupply issue. But demand has been steady, thanks to DFW's continued population growth. The region boasted four of the country's 10 fastest-growing cities last year, and it is on pace to overtake Chicago as the third-largest metro in the U.S. by 2035.
That continued demand prompted Middleburg's decision to move into Texas, part of the firm's broader expansion plans into western markets like Colorado, Utah, Arizona and Nevada.
Middleburg has completed more than $4.5B in transactions since 2004 and delivered more than 32,000 units across nine states. The firm is also an active single-family rental developer. Douthit said he has his eye on the metro's northwest area for future build-to-rent projects.
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Middleburg aims to complete a couple of DFW deals per year as the firm builds out a pipeline of projects, Douthit said.
"Q1 demand results were extremely encouraging, and so I feel good about the opportunity to hit at least the two deals a year,” Douthit said. “Middleburg’s shown a willingness to go beyond that, if we can be successful."
Middleburg has one other associate in DFW beyond Douthit, but the company has dedicated the resources to grow quickly. Douthit said the firm’s enthusiasm for the metro means the DFW team could expand to around eight people by this time next year.
Middleburg is also considering expansions into Austin and Houston, while Douthit concentrates on North Texas.
“As Middleburg has continued to scale over the last several years, we’ve been intentional about expanding into markets where long-term housing demand and demographic trends align with our investment strategy,” Scott Makee, Middleburg’s regional development partner-West, said in a statement. “Aaron’s track record, relationships and regional market expertise make him a strong fit for where we’re headed as a company.”
Douthit has more than a decade of multifamily development experience, most recently serving as vice president, area development partner at JPI. During his four-year tenure with the firm’s central region development team, JPI delivered nearly 9,000 units across DFW.
Prior to that role, Douthit spent almost six years in development, acquisitions and investments roles with JPI. He worked on Class-A market-rate communities, attainable and affordable housing developments, and multifamily assets across both Texas and Southern California for the firm.
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