"Multifamily investments have done so well over the last 10 years it's hard for me to say anything but they are the best thing going," Sam Lewis, a vice president with Grubb & Ellis Co.'s Dallas multifamily team, tells GlobeSt.com. "It seems investments in A, B,and C properties have exceeded expectations in our market."

The Sun Belt's multifamily market is nearly as hot as the weather. Cap rates range from 8% to 8.5% in most cases, explains Lewis, "with expectations of increasing income common in most cases."

Holliday Fenoglio Fowler's Barry Brown, a senior director in Dallas, pegs cap rates as high as 8.75%, depending on the product type. The Texas market, in general, is looked upon favorably by "institutional investors looking for a hedge against a downside in the market" to private syndicated buyers, with the backing of Freddie Mac and Fannie Mae.

And the lenders, says Brown, like what they see in Texas. "Lenders are very receptive to the multifamily product. Both the equity side and the debt side have a very strong appetite," he says.

Dallas remains in the nation's Big 3 multifamily growth markets despite a slight backslide in occupancy at the end of the second quarter, says M/PF researchers. Demand is such that investors are holding onto all classes of properties until the right deal comes along. Hendricks & Partners say sales in the first quarter totaled just 25 in comparison to 45 in Q1 2000. And, 14 of this year's sales were pre-1974 complexes, which brought an average of $23,207 per unit, and two in the 1980-constructed category that carried an average per unit selling price of $39,063. Six sales of complexes built after 1990 commanded per unit prices upward of $54,047. Last year, Phoenix had one of its best years ever and this one is proving to be just as bountiful. Eleven complexes sold in the first quarter, fetching an average price of $55,847 per unit.

Brown says to look for sales to pick up in the latter part of this year. "There is a tremendous appetite to purchase" in Texas, he reports.

It's a triple-packed equation of jobs, people and living quarters as the Sun Belt's economy steams as many in other parts of the country cool. "Multifamily has been historically viewed as less volatile in terms of income stream than other real estate investments," Lewis says. "The income is more consistent, which in turn, makes it a safer investment overall.