Wednesday, July 30, 2014

Booming! DFW's top 10 submarkets for apartment growth

The Dallas area has been outperforming the national average for rental property growth, which is up nearly 3.9 percent in June year-over-year.

And developers are jumping on board, delivering the third biggest supply of new apartments in the U.S., according to data from Axiometrics, a Dallas-based analytics firm that tracks the nation's apartment housing market.

"If you include Fort Worth, we'd hop over Houston," Jay Denton, vice president of research for Axiometrics, told the Dallas Business Journal."This is one of the top markets for deliveries and we're seeing strong rent growth. We are developing 11,000 to 13,000 new units a year and barely satisfying demand."

Next year, developers are expected to add 11,724 new apartments, he added.

The Oak Lawn submarket has the most new apartments in the pipeline, with 4,954 scheduled for delivery into next year, he said. Apartments in the neighborhood have some of the highest rents in town, with an average monthly payment of $1,666.50.

That's because North Texas has been one of the fastest-growing regions for jobs in the United States. And people always need a place to live.

That demand has caused the average effective rent to rise about $41 in June, year-over-year to an average effective rent of $982.10, according to Axiometrics research.

Right now, the Dallas area is on pace to see roughly 13,500 new apartments come to the market this year, Denton said. In certain submarkets such as Uptown, landlords and developers could see a lag of rent growth as the market is inundated with new supply, but it will keep up with the overall rise in effective rents in the metro area, he added.

The Dallas area submarkets seeing the greatest rental increases are in some surprising neighborhoods. That's because those neighborhoods aren't seeing the development boom Uptown and West Plano are seeing, Denton told me.

We take a look at the top 10 neighborhoods for apartment rental growth in the Dallas area.

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#1.  A Minneapolis real estate investor has purchased this large northeast Dallas apartment community near Interstate 635. The northeast Dallas submarket is seeing the most annual rental growth in DFW, with a 9.48 percent rental growth rate and a 89 percent occupancy rate.

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#2.  The I-820 corridor is the No. 2 submarket for apartment rental growth in North Texas. The accessibility of the corridor helps the landlords boost rents. The submarket has a 7.87 percent annual rent growth, with a 93 percent occupancy rate.

 Mission Ranch Mesquite
#3.  The apartment community, now called Advenir at Mission Ranch, in Mesquite features luxury amenities, such as brushed nickel hardware, wood flooring, a resort-style swimming pool. The Mesquite submarket is the No. 3 area for apartment growth, with a 5.93 percent growth of annual rent and a 95 percent occupancy rate.

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#4.  The University of North Texas in Denton is one of North Texas' largest universities by enrollment. That could be one reason why Denton County is the No. 4 submarket in North Texas for apartment growth. Denton County has a 5.90 percent growth of annual rent, with a 94 percent occupancy rate.

 River Legacy
#5.  River Legacy Park helps anchor north Arlington, which is the No. 5 submarket in North Texas for apartment growth. The area saw a 5.76 percent increase in annual rents, with a submarket occupancy rate of 95 percent. Viridian DFW, a massive mixed-use development, is one of the large projects underway.

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#6.  AT&T Stadium in Arlington brings a focus onto central Arlington, which is the No. 6 submarket in North Texas for apartment growth. The area saw a 5.58 percent increase in annual rents, with a submarket occupancy rate of 94 percent.

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#7.  A look at the exterior of the boutique-like apartment project in North Dallas at the northwest corner of Montfort Road and Verde Valley Lane near Addison. The submarket is the No. 7 area in North Texas for apartment growth. Northwest Dallas is seeing rents grow 5.39 percent, with a 95 percent occupancy rate in the submarket.

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#8.  Draws like Lone Star Park have helped Grand Prairie rebound from the national recession faster than other cities. Grand Prairie is the No. 8 area in North Texas for apartment growth. The city is seeing rents increase 5.38 percent, with a submarket occupancy rate of 96 percent.

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#9.  Four large bird houses overlooking White Rock Lake, highlight the draw of the neighborhood. The south White Rock and I-30 submarket is the No. 9 top submarket in North Texas for apartment growth. The neighborhood is seeing rents increase 5.12 percent, with a submarket occupancy rate of 94 percent.

 Presbyterian Village North
#10.  The 350,000-square-foot campus expansion project of Presbyterian Village North will accommodate 200 seniors each year. The growing North Dallas community is one reason the submarket ranks as the No. 10 top submarket in North Texas for apartment growth. The neighborhood has seen rents rise 5.11 percent, with a submarket occupancy rate of 93 percent.


Candace Carlisle- Dallas Business Journal