Everything you wanted to know about the Urban Core, Uptown and Downtown Dallas, Texas & Dallas Ft. Worth Area Real Estate - Its growth, prosperity, setbacks and unprecedented revitalization is told here...Randall Turner of Harvard Companies, Inc 214-373-0007, 3500 Oak Lawn Avenue, Suite 325, Dallas, Texas 75219
Wednesday, May 27, 2015
Dallas Multifamily: Diversified Economy to Drive Apartment Demand
slumping oil prices will continue to temper momentum, Marcus & Millichap
says the Metroplex’s diversified economy will still record strong job
growth this year, driving apartment demand and keeping vacancy at
historically low levels.
Thousands of luxury apartments are slated for completion this year, the
firm said in its first quarter 2015 market report, specifically in the
Intown Dallas, Oak Lawn/Park Cities and Richardson submarkets, where
several companies are relocating and expanding.
"Financial services firms including State Farm, TD Ameritrade and
Liberty Mutual are growing in northwest Dallas and plan to add thousands of
jobs over the next few years, helping to drive the development of these new
multifamily projects," the report said. "While office leasing is
translating to strong professional job growth, the Metroplex’s industrial
sector is one of the nation’s strongest. The rise of e-commerce is fueling
industrial construction, and hiring in distribution, logistics and
transportation throughout the market will support stronger operations in
older well-located Class-C properties, supporting rent growth. A
bright economic outlook is encouraging developers, and completions will
reach their highest level in more than a decade this year.
"Strong economic growth will persist throughout 2015, feeding
optimistic outlooks for the Metroplex. Deliveries will stay elevated this
year, compared with last year’s additions to inventory.
"However, the Metroplex’s history of absorbing large influxes of
supply will keep investors enthusiastic, though mindful of competition from
new supply in specific submarkets. The buyer pool is expanding, especially
as investors from the West Coast seek to expand portfolios in a
well-performing market with higher initial yields. These buyers, many from
California, are targeting Class-B or Class B-minus properties with cap
rates in the low- to mid-6 percent range.
"Meanwhile, local buyers are shifting their focus to close-in Class-C
assets, which may offer strong upside potential. In addition, the number of
properties selling above $20 million is rising, and transactions in this
price range have made up a significant share of sales during the last few
years. The trend is continuing in 2015 as a large portion of deals in the
first quarter had a price above $20 million." Marcus & Millichap