North Texas apartment building takes off | Dallas-Fort Worth

Wednesday, March 30th, 2011 at 1:43 pm  
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North Texas apartment building takes off

VERNON BRYANT/Staff Photographer
During the last six months, builders have started more than 3,200 apartments in the Dallas-Fort Worth area.

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By STEVE BROWN

Real Estate Editor

stevebrown@dallasnews.com

Published 30 March 2011 11:17 AM

With rents rising and vacancy rates drifting lower, apartment developers are ramping up construction in North Texas.

During the last six months, builders have started more than 3,200 apartments in the Dallas-Fort Worth area. And analysts are increasing their forecast for this year’s apartment building.

“Construction is kicking up a little bit faster than we thought it would,” Greg Willett, a vice president with apartment analyst MPF Research, said Wednesday. “My new expectation is we will start 8,000 to 10,000 units here this year.”

MPF Research had previously forecast that apartment starts in North Texas would range from about 5,000 to 7,000 units in 2011.

But demand for rental homes continues to grow.

“People are not buying as many homes at this point given what’s going on there in the market,” Willett said.

During the first quarter, apartment landlords leased an additional 1,750 units in the D-FW area. That pushed vacancy rates below 9 percent. Rents were up almost 3 percent from a year ago to an average of $770.

Willett said apartment landlords have focused on keeping tenants while ratcheting up the monthly rent.

“Operators had to focus their attention on resident retention among a group of renters vulnerable to pricing sticker shock at renewal time,” he said.

Vacancy rates are lowest in the newer, high-end apartments built in markets including Plano, Las Colinas and Frisco — 5 percent or less empty, according to MPF Research.

About 5,000 apartments are under construction in the D-FW area, and 20 projects have begun in the last six months. But most of the apartment developments getting under way are smaller than in previous years, Willett said.

“Financing sources are willing to green light new apartment projects in North Texas, but you can tell we’re not quite back to business as usual by the comparatively small sizes of most of the properties getting started,” he said. 

Apartment construction still remains well below where it was at the top of the market in 2009, when more than 18,000 units opened.

via dallasnews.com

Rental Apartment Vacancies – Highest Levels In 20 Years

Monday, January 4th, 2010 at 5:46 pm  
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By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

Apartment vacancies in Dallas-Fort Worth have grown to the highest level in more than 20 years thanks to a combination of overbuilding and the recession.

At the end of 2009, about 11 percent of local rental units were empty. Occupancy fell by a full percentage point in the fourth quarter as several large apartment communities opened their doors, adding to inventory.

“While those numbers are bad, they actually look better than we’d anticipated a few months ago,” Greg Willett, vice president of research with MPF Research said in the firm’s report released Monday. “Several of the properties that were finished right at the end of 2009 report initial lease-up moving along pretty well, so North Texas sidestepped the seasonal net move-outs that are routine during the last few months of the year.”

D-FW renters leased an additional 1,520 apartments in the final months of 2009. But at the same time, developers were opening the doors for 7,895 new units.

“That’s the biggest quarterly block of new supply seen since savings and loan associations fueled a frenzy of overbuilding during the early and mid-1980s,” Willett said.

More new apartments were added in North Texas in 2009 than in any market in the country – 18,029 units.

Last year the sagging economy reduced demand for Apartment Fort Worth.

“Job loss weakened the apartment figures seen early in the year,” Willett said.

For all of 2009, net apartment leasing was down by 890 units from 2008, MPF reports.

Overall rents in the area dropped by 2.6 percent last year to an average of $748 a month.

With the credit crunch and recessions, apartment development in D-FW and across the country has slammed to a halt.

Willett said that developers began only a handful of new projects here in the second half of 2009.

But more than 11,000 Apartment in Dallas remain under construction.

“Texas will be one of the last markets across the country to wrap up its construction cycle” Willett said. “Thus, despite the comparatively positive outlook foreseen for the local economy, Dallas-Fort Worth seems apt to trail the apartment market recovery anticipated elsewhere.

“It’s certainly possible that occupancy has essentially bottomed out now, but it’s going to be a while before the leasing environment is healthy enough for rents to move up again.” 

  
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