DALLAS-Dallas-Ft. Worth multifamily owners have a friend in the investment community, thanks to this year’s less-than-friendly stock market. At least that was the case prior to Sept. 11, say two leading DFW multifamily execs. Now, they’re just waiting to see what happens.

The Dallas-Ft. Worth’s hottest ticket comes with overall occupancy in the mid-90s, above-average per unit selling and rental rates, plenty of product and ample interest from investors inside and outside the state. The bread and butter of the multifamily arena are older properties, which are regularly changing hands as private investors look for a safe haven for their capital.

“This year, prices overall have been up,” Sam Lewis, Grubb & Ellis Co. vice president in Dallas, tells GlobeSt.com. The firm’s DFW multifamily team has hawked $130 million, with Lewis alone accounting for 10 of those transactions. The dominant player has been class C properties attracting institutional and private buyers alike, willing to pay in the mid to upper $20,000 per unit and allowing enough leeway to invest more money via upgrades.

Can’t say what’s going to happen now, Lewis emphasizes. The phones are ringing less than they were before Sept. 11. But Lewis remains optimistic because “activity has slowed, but it hasn’t halted.”

The market’s so hot that a property priced in the “market boundaries” can rope a buyer in 30 to 45 days, says Lewis. “It’s as short as I’ve seen it in years,” he adds. Underwriters have been on the conservative side and more so since Sept. 11. But, he says, “going forward it feels like they have the answer.”

Buyers, hailing from all parts of country, have one thing in common: They are veteran owners in the DFW marketplace. Lewis’ latest transaction is a perfect example. The 19-year-old Burgundy Condominiums, located at 11911 Marsh Lane in Dallas, just fetched a shade under the $3.4-million asking price for 60% ownership or 111 out of 178 units. The New York buyer did a 1031 exchange investing proceeds from his home state into Texas, where he owns other complexes. The seller was Hong Kong-based International LLP, also a player in the DFW market. Lewis represented the buyer, who’s planning an extensive upgrade, and AmeriSouth Real Estate Services Inc. acted for the seller of the class C holding.

Jeff Pritchard of O’Boyle Properties Inc. in Dallas agrees with Lewis that the bulk of this year’s sales has been class B and C holdings. O’Boyle Properties is one of, if not the, most active multifamily brokerage firms in the metroplex. In 2000, the team completed 30 to 40 multifamily sales. And, it’s on track to do the same this year or it was. Fewer institutional investors will be buying due to the stock market plummet since Sept. 11, Pritchard says. Despite the sharp downturn, he expects the DFW region will still show a net positive when the final count is done.

It’s good news across the board for sellers. Class B is drawing $45,000 to $65,000 per unit and class A is now riding at $70,000 to $100,000. “The long-term interest rate for debt has been very good to the marketplace,” Pritchard says. Properties are coming to market and closing in 120 to 180 days, he says, and most sellers are getting what the price they want.

And just what is the hottest area around town? North Dallas, they concur. “Anything on the north side of Dallas is going to get looked at and looked at hard,” says Lewis.

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