DALLAS—With record low multifamily inventory on the market and backed by healthy demand, multiple offers are not uncommon in this climate. Taylor Snoddy, managing director at Transwestern, provides some insight into the multifamily market in this GlobeSt.com exclusive.
“There is minimal amount of product on the market right now–in fact, it's the lowest we've seen at the start of any year during this cycle,” Snoddy tells GlobeSt.com. “The incoming presidency and recent spike in interest rates are likely contributing factors. However, buyer demand remains very healthy, as we are seeing a high amount of equity committed to deals and buyers being consistently oversubscribed. Due to the lack of offerings, we are getting multiple offers on our listings prior to placing the asset on the market.”
A modicum of relief came in the form of some 1,600 closed North Texas units valued at $85 million in North Texas late last year. Snoddy and Transwestern vice presidents Philip Wiegand and James Roberts represented the sellers and also sourced the buyers on the transactions.
“These transactions represented a wide range of local, national and international buyers, with demand driven by Dallas-Fort Worth's strong job growth and rent increases,” said Snoddy. “We received strong investor interest despite the uncertainty from the election and the spike in interest rates.”
Some specifics on the properties:
Parque Del Sol, a 200-unit community at 238 E. Oates Rd. in Garland, TX was acquired by a New York-based investment group for an undisclosed purchase price. The property is within walking distance of grade schools and has excellent amenities including a clubhouse, swimming pool, playground and mature landscaping.
Eastfield Plaza, a 216-unit community at 2626 John West Rd. in Mesquite, TX was purchased for an undisclosed purchase price by an Oregon-based investment group that is planning extensive renovations to the property.
Woods of Ridgmar, a 235-unit community at 2200 Taxco Rd. and 2200 Ridgmar Plaza in Fort Worth, was acquired by a Northern California-based investment group for an undisclosed purchase price.
34 Hundred, a 484-unit community at 3400 Varsity Dr. in Tyler, TX, is across the street from the University of Texas at Tyler. The property was acquired by a Dallas-based investment group for an undisclosed purchase price, and will undergo extensive interior and exterior renovations.
Dallas' North Park Terrace, a 310-unit community at 8662 Park Lane and Pecan Tree, a 173-unit community at 3001 Kendale Dr., were both acquired by a New York-based investment group for an undisclosed purchase price.
While these types of bulk transactions act as a pressure valve release, the supply concern is still at the forefront, says Snoddy.
“There are a few concerns at the top of owners' minds at the moment,” Snoddy points out. “The first is supply, as Dallas-Fort Worth has 10% of the nation's units under construction. The second is lack of sufficient wage growth to keep up with such strong rental growth–46% of DFW renters are considered 'cost burdened,' meaning they spend over 30% of their income on rent. Lastly are increasing interest rates. Optimistically, we see future rental housing demand nationally in the 400,000 to 500,000 renters through 2025 with millennial/baby boomer growth. Based on supply metrics, we aren't set up to meet this demand.”
Since 2014, Transwestern's Dallas multifamily investment services group has averaged a closing every seven business days, with transactions exceeding 25,000 units and $1.2 billion in aggregate value. Based in Houston, Transwestern has 34 US offices and more than 180 offices in 37 countries as part of a strategic alliance with BNP Paribas Real Estate.
DALLAS—With record low multifamily inventory on the market and backed by healthy demand, multiple offers are not uncommon in this climate. Taylor Snoddy, managing director at Transwestern, provides some insight into the multifamily market in this GlobeSt.com exclusive.
“There is minimal amount of product on the market right now–in fact, it's the lowest we've seen at the start of any year during this cycle,” Snoddy tells GlobeSt.com. “The incoming presidency and recent spike in interest rates are likely contributing factors. However, buyer demand remains very healthy, as we are seeing a high amount of equity committed to deals and buyers being consistently oversubscribed. Due to the lack of offerings, we are getting multiple offers on our listings prior to placing the asset on the market.”
A modicum of relief came in the form of some 1,600 closed North Texas units valued at $85 million in North Texas late last year. Snoddy and Transwestern vice presidents Philip Wiegand and James Roberts represented the sellers and also sourced the buyers on the transactions.
“These transactions represented a wide range of local, national and international buyers, with demand driven by Dallas-Fort Worth's strong job growth and rent increases,” said Snoddy. “We received strong investor interest despite the uncertainty from the election and the spike in interest rates.”
Some specifics on the properties:
Parque Del Sol, a 200-unit community at 238 E. Oates Rd. in Garland, TX was acquired by a New York-based investment group for an undisclosed purchase price. The property is within walking distance of grade schools and has excellent amenities including a clubhouse, swimming pool, playground and mature landscaping.
Eastfield Plaza, a 216-unit community at 2626 John West Rd. in Mesquite, TX was purchased for an undisclosed purchase price by an Oregon-based investment group that is planning extensive renovations to the property.
Woods of Ridgmar, a 235-unit community at 2200 Taxco Rd. and 2200 Ridgmar Plaza in Fort Worth, was acquired by a Northern California-based investment group for an undisclosed purchase price.
34 Hundred, a 484-unit community at 3400 Varsity Dr. in Tyler, TX, is across the street from the University of Texas at Tyler. The property was acquired by a Dallas-based investment group for an undisclosed purchase price, and will undergo extensive interior and exterior renovations.
Dallas' North Park Terrace, a 310-unit community at 8662 Park Lane and Pecan Tree, a 173-unit community at 3001 Kendale Dr., were both acquired by a New York-based investment group for an undisclosed purchase price.
While these types of bulk transactions act as a pressure valve release, the supply concern is still at the forefront, says Snoddy.
“There are a few concerns at the top of owners' minds at the moment,” Snoddy points out. “The first is supply, as Dallas-Fort Worth has 10% of the nation's units under construction. The second is lack of sufficient wage growth to keep up with such strong rental growth–46% of DFW renters are considered 'cost burdened,' meaning they spend over 30% of their income on rent. Lastly are increasing interest rates. Optimistically, we see future rental housing demand nationally in the 400,000 to 500,000 renters through 2025 with millennial/baby boomer growth. Based on supply metrics, we aren't set up to meet this demand.”
Since 2014, Transwestern's Dallas multifamily investment services group has averaged a closing every seven business days, with transactions exceeding 25,000 units and $1.2 billion in aggregate value. Based in Houston, Transwestern has 34 US offices and more than 180 offices in 37 countries as part of a strategic alliance with
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