Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-Racking up its second-largest gain in two decades, the Dallas/Fort Worth multifamily sector’s occupancy has climbed to 92.2%, up one point since June and two points higher than last year. Adding to the momentum is a sharp decline in construction, according to M/PF YieldStar’s third-quarter analysis.

“For the first time in several years, the amount of construction that we’re seeing in Dallas/Fort Worth makes sense,” Greg Willett, vice president of research and analysis for the Carrollton, TX-based M/PF YieldStar, tells GlobeSt.com. “They finally got the message.” On average, builders deliver 10,000 apartments annually, but this year most likely will add just 7,000 units, give or take just a bit, he says. “You’re going to have to go back to 1993-94 to see something like that,” he says.

There were 9,819 units rising at the third quarter’s close, but only two-thirds will deliver this year, Willett says. To date this year, 2,400 units have come on line. The hot pockets are Las Colinas, where 1,785 units will deliver in the near term and in-town Dallas, which has 1,306 units under way.

Gulf Coast hurricane evacuees had just a moderate impact on North Texas markets. Willett says absorption totaled 5,960 units from July through the end of September. And with the newcomers, he’s projecting that the historical Q4 slump could be averted.

Year-to-date demand is 21,000 units. The 20-year record, set in 2000, was 26,000 units. “We won’t beat 26,000,” he says. “But again, there’s been a huge jump in momentum from where we had been in the past few years.”

The influx of evacuees helped neighborhoods like the Highlands area, Mesquite, Southwest Dallas and the far northeast plus West Irving, hubs for 1970s and 1980s product. The end result is the first uptick in several years. The 1970s-era complexes are now 88.8% filled and 1980s product has hit 92.5%, research shows.

Class A units have reached 95.4% for 1990s-era development while apartments built in the past five years are 94.4% occupied. Pockets with 95% or higher occupancies are East and West Plano, Las Colinas, North Ellis County, Fort Worth’s in-town, Museum District and northern submarkets. In-town Dallas, a leader until recently, slipped to 92.6%, due in large part to the number of units coming on line.

Despite the overall uptick, rent growth didn’t keep pace. “It actually lost steam over the past few months,” Willett says in the report. September’s average, $686 per month, mirrors last year’s prices. He attributes the slump to a seasonal end of leasing activity and a concerted effort by owners not to appear to be price gouging evacuees.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.