DALLAS-With the first quarter now closed, there's a decided change in attitude toward vintage multifamily product, which accounts for 40% of the 551,313-unit inventory. Occupancy in the 1980s-era block rose 3.2% from a year ago.
"To see some progress in that older block is very encouraging," Greg Willett, vice president of locally based M/PF YieldStar Inc., tells GlobeSt.com. "We are starting to make some headway in filling back in that 1980s product." The units, most of which rose in 1980-85, hit 93.2% occupancy or 0.4% higher than the market's overall Q1 average.
"The general story is we've had pretty solid demand in the first quarter," Willett says. "Occupancy is up quite a bit in the year-over-year analysis."
Rent too is showing a measured gain. The Dallas/Fort Worth average is now resting at $698 per month, up $9 from the Q4 2005 close. Fort Worth's average is $636, a $2 gain, while Dallas hit $718 for a $9 uptick, according to M/PF's latest tally. "I am confident by the time we get to the second and third quarter, the operators are going to get more aggressive," Willett predicts. The region, he adds, is on track for a 3% to 4% hike in rents by year's end.
From a construction standpoint, the Lewisville submarket has replaced in-town Dallas as the leader in starts. There are 1,426 apartments coming on line for the 20,420-unit inventory. Regionwide, there are 8,406 units under construction, with the first large block due to hit in three months and the next large delivery in Q1 2007. Dallas/Fort Worth historically adds 10,000 apartments per year. "We're not showing a huge amount in the pipeline," Willett says, reiterating past assessments that Dallas-area developers are more in step than usual with demand and supply.
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