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DALLAS-The Dallas-Ft. Worth multifamily market’s rebound will spike sales prices 3.2% on the average over the course of the year as the region sheds an overbuilt reputation, assesses Marcus & Millichap in its latest report.

Matthew Fitzgerald, regional manager for the California-based Marcus & Millichap, tells GlobeSt.com that “Dallas is on the radar screen for most of the institutional investors.” Top-of-the-line properties are bringing roughly $80,000 per unit, low in comparison to other major metropolises. “$80,000′s not going to get you a class A unit in LA,” he says. Los Angeles multifamily properties are drawing better than $110,000 per unit while Northern California holdings are fetching over $200,000 per unit, he says.

Fitzgerald’s team is right on the mark for where the DFW region had been and where it’s going. In the Marcus & Millichap midyear report, first-quarter sales were down to $98 million versus $232 million for the same period in 2000. But, sales will pick up as the year’s end draws closer. The first quarter’s limited class A sales caused the average per unit price to dip to $41,000 as investors bought older properties with an eye on renovation and rent hikes to bolster coffers, according to the report. “The tide has turned and the outlook is positive,” conclude researchers.

Just last week, the high-ticket sale of the 449-unit Phoenix in Dallas’ Midtown section recorded the highest per-unit draw of the year, according to brokers. The final price is closely guarded, but insiders claim it definitely brought more per unit than the highest year-to-date sale for the 908-unit Post Shore in Las Colinas, which has been pegged upward of $70 million or better than $110,000 per unit.

Marcus & Millichap’s Fitzgerald says the upswing results from developers reacting “very quickly to the changes in the marketplace.” The region is seeing “a lot of merchant builders building specifically to sell,” he explains. “National institutional money has really graded Dallas-Ft. Worth as a place to own, which is something that hasn’t happened in a while.”

Spencer R. Stuart Jr., executive vice president and COO for Palladium USA International Inc., tells GlobeSt.com that 10 serious buyers jockeyed for Palladium’s prestigious Grand Venetian, a 98%-leased uspcale development in the Las Colinas Urban Center. “That indicates it’s an active market,” says Stuart, who confides the sale will close by August’s end.

Palladium’s strategy is to build and sell upon lease-up, the soon-to-come destiny for the 65%-leased Verona, a 16-story high-rise near the Galleria in North Dallas. The developer tickets urban infill sites because, says Stuart, “people are willing to pay for being in a convenient location.” Tenants are putting out a low of $1.11 per sf to as much as $1.58 per sf to live in a Palladium project in the DFW area.

Palladium is hard at work on the 17-floor Grand Treviso in Las Colinas, which carries an April or May 2002 delivery, while at the same time eyeing up an infill site in Dallas for yet-another luxury high-rise. That project is too preliminary to discuss right now, he says.

Slowing construction has brought the higher occupancies and rent increase that always follow such a decision. The region’s monthly rental is now $695 on the average, with Dallas’ in-town properties drawing an average of $1,140. The low end is coming from South Dallas, where rent averages $569 per month–still a 7.8% growth and the highest in the region from that respect. The bottom line, says Fitzgerald, is “the great balance that we’ve got going here.

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