Millennials Boost Historically High Construction Activity

McKINNEY, TX—With employment growth slated to further improve during the second half of this year as a result of corporate relocations and expansions, a continual inflow of new residents is expected. This arrival of more Millennials and households during a period of historically high construction activity will result in market conditions mirroring last year, when vacancy adjusted minimally and annual rent growth reached the 4% range, according to a report by Marcus & Millichap.

Another new construction example is the second phase of a multifamily development, the Royalton at Craig Ranch, where SWBC Real Estate is underway on its latest project. This phase will consist of one-bedroom, two-bedroom and three-bedroom units.

“Our first property, Central Park at Craig Ranch, is finalizing its initial lease-up and is already 92% leased,” said Stuart Smith, senior vice president of SWBC Real Estate. “The second phase, the Royalton at Craig Ranch, will be very similar to the Central Park property as both properties will consist of 271 units as well as a four-story parking garage. The properties will be located next to each other between Collin David S Drive and Van Tuyl Parkway.”

The property will have a clubhouse with a community business center, an attached parking garage, 24-hour fitness center, a pool, spa with sunning decks and WiFi, outdoor gathering areas, grills, and other community amenities. The units will consist of 10-foot ceilings, granite countertops, stainless steel appliances and washer/dryer hook-ups. In addition to the amenities developed specifically for the complex, the tenants at Central Park at Craig Ranch can take advantage of the surrounding amenities such as the Craig Ranch Fitness & Spa, The Ballfields at Craig Ranch, Michael Johnson Performance Center, the TPC Craig Ranch golf course, a community dog park, and 350 acres of green space with hiking and biking trails.

“An abundance of new developments are currently under construction in and around Craig Ranch, so we feel the timing of the second phase should work well with the continued growth in the McKinney area,” said Smith.

The architect for the project is locally based Cross Architects and the engineering firm is Stantec. The general contractor for the project will be SWBC Builders LLC. The proposed total construction time from start to finish is 22 months, with the first units planned to be available in March 2021.

“The Royalton at Craig Ranch will be a 271-unit class-A wrap-style property located in the center of the Craig Ranch master-planned community in McKinney,” Smith tells GlobeSt.com. “We feel that with the numerous announcements regarding new office, retail and entertainment centers in the area, the demand for new housing will continue to grow in the foreseeable future.”

SWBC Real Estate is currently developing 1,500 multifamily units throughout Texas and has been actively acquiring value-add apartment properties in the state.

In the past three years ending in June, Dallas/Fort Worth’s rental inventory expanded by 10% or 74,000 units, yet vacancy adjusted moderately during the period. Instead, unit availability hovered in the high 4 to high 5% band, with rental demand supported by the creation of 410,000 jobs and robust in-migration, according to the Marcus & Millichap report. The recent streak of strong leasing velocity was highlighted by second quarter 2019, when a record 12,000 apartments were absorbed.

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