Dallas/Fort Worth Multifamily Market Loses Some Ground in Q1

"It's one of those quarters where it's more of the same," Greg Willett, vice president of the Carrollton, TX-based M/PF YieldStar, tells GlobeSt.com. "The only thing that really jumped out at me was the construction in North Fort Worth." The first quarter brought the start of 1,200 units by four developers, one of whom already had a project coming out of the ground in the area. The stepped-up activity will bring a 37% hike in inventory within 18 months, he says.

North Fort Worth historically is a single-family nesting ground. Only 600 of the 3,400 apartments in the inventory were built before 1990. Willett says Q1 ended with the submarket's occupancy at 89.7% and average rent at $722 per month--both above the region's numbers.

Elsewhere in the metroplex, Willett says in-town Dallas, Las Colinas and West Plano continued their momentum from last year. Occupancies range from 93.1% to 94.9%. The trio also picked up rent growth of 1% to 2.6% whereas the metroplex dipped 0.7% from fourth quarter 2004 and dropped 1% from a year ago, according to Willett.

At the end of Q1, Willett's research puts the region's occupancy at 89.6% versus 90.2% a year ago. The average rent is hanging at $688 per month.

In other market fundamentals, Willett says 1,300 units came on line and 2,500 started to rise in Q1, taking the construction level to 10,780 units. Last quarter was the first time in several years that construction fell below 10,000 units. In-town Dallas and Las Colinas each have 1,800 apartments en route.

"It will be very sluggish movement over the next year. With the amount of construction, we think demand will keep up and exceed the delivery level, but not by a lot," Willett says, citing a Q1 absorption of 3,400 apartments across the board. "It will get a little better through the year, but not dramatically."