Rent and Job Losses Factor into DFW Multifamily Acquisitions

ARLINGTON, TX—When examining rent and job losses during COVID, investors are taking a good hard look at the outperforming DFW market, with losses less severe than the nation’s decline. To that end, a private multifamily owner-operator CONTI Organization has expanded its footprint in the state with the acquisition of Vine Apartments, a 420-unit complex located at 711 Trinity Circle. The property is centrally located between Dallas and Fort Worth.

This is CONTI’s 43rd acquisition in Texas, increasing the company’s current Texas portfolio to 31 properties and more than 9,000 units. The price was undisclosed.

“Vine is another strategic addition to our portfolio and is within a short drive of major employers including American Airlines, Amazon, General Motors, GM Financial, Bell Textron and others. With unique access to both Dallas and Fort Worth, Vine offers a convenient option to renters who need workforce housing close to employment,” said Stewart Hsu, co-founder and president, CONTI Organization.

Built in 1980, Vine consists of 23 three-story garden-style buildings covering approximately 21 acres. The property has direct access to River Legacy Trail as well as a swimming pool, fitness center, dog park, sand volleyball court and tennis courts.

“Vine aligns perfectly with our corporate focus and outlook for multifamily investments,” said Carlos Vaz, co-founder and CEO of CONTI Organization. “Everything we do at CONTI is part of a well thought-out process that is aligned to our 10-year vision.”

The Vine acquisition was brokered through Daniel Baker and Chandler Sims with CBRE.

“At CONTI, we work to benefit the lives of everyone we touch and cultivate long-term relationships with our people, our residents, investors, vendors and lenders,” Vaz tells GlobeSt.com.

The Dallas/Fort Worth multifamily market experienced modest downward movement in market fundamentals in second quarter 2020 due to COVID-19 and the economic downturn, according to a report by CBRE. The average effective rental rate declined 0.6% from the prior quarter. Occupancy edged down 30 basis points to 94.3%.

While these trends were unfavorable, especially in a quarter that usually experiences rising rents and occupancy due to seasonal leasing trends, the Dallas/Fort Worth market fared slightly better than the US in terms of rent loss, at -1%.

One factor for the above-average performance is the economy. While Dallas/Fort Worth lost 333,000 jobs during the three-month period from February to May, the 8.6% employment loss was less severe than the nation’s 12.8% decline.

Dallas/Fort Worth achieved positive net absorption of 3,801 units in the second quarter, but added 6,319 units in the quarter and 25,625 in the past four quarters, says CBRE.

With weak demand (due to the economy and low household formation) and a steady stream of new deliveries, effective rents and occupancy are expected to edge down further in the second half of the year.

In second quarter, class-C rents and occupancy held up the best followed by class B. Moreover, Fort Worth market fundamentals held up slightly better than Dallas, and generally, suburban submarkets outperformed urban core submarkets, according to the CBRE report.