Dallas-Fort Worth benefits from one of the most robust economies in the country, having remained on an upward trajectory and above national trends throughout the cycle. Growth is supported by the state’s economic environment which has come a long way since its energy-based roots. Although the state still has a substantial oil sector, other sectors have gained strength—education and health services, professional and business services, trade, construction, leisure and hospitality—have all seen remarkable increases. This economic cornucopia has boosted the multifamily sector and will likely continue to do so in the foreseeable future.
In 2019, Dallas-Fort Worth led the nation in the number of multifamily units underway and, given the current pipeline, the metro will likely maintain its leading position this year as well: as of early 2020, it had more than 45,000 units under construction, according to Yardi Matrix data. Of DFW’s three main regions, North Dallas is far ahead Fort Worth and Suburban Dallas, with the former boasting more units underway (24,694 units) than the other two main areas combined (20,441 units). We’ve zoomed in on North Dallas’ development pipeline to pinpoint the submarkets with the largest number of units underway, with details in the ranking below.
Counting nearly 200 restaurants and some 15,800 residents, the Town of Addison is said to have more restaurants per capita than any city in the U.S. In March, the submarket had 2,444 units under construction in seven Lifestyle properties, nearly all slated for delivery by the end of the year. Demand here is strong, as, despite sustained supply additions and average rent that rose to $1,363 in January, the occupancy rate in stabilized properties stood at 94.8 percent.
JPI is one of the most active developers in the area, with some 800 units underway in two communities and another 350 units in the planning phase. The firm’s projects underway here are the 411-unit Jefferson Alpha West at 13505 Inwood Road and the 390-unit Jefferson East Branch at 14175 Dallas Parkway. Both developments are built with construction loans originated by Synovus Bank. Each community comprises a retail component, and both are slated for completion by year-end. The latter has a second phase in the planning stage, which will consist of 351 units.
4. North Garland/Rowlett/Sachse
The North Garland/Rowlett/Sachse submarket has plenty of attractions: Garland houses more than 375 manufacturers while Rowlett is on Lake Ray Hubbard where a $1 billion waterfront mixed-use project broke ground last November. In March, developers had 2,619 units underway in nine properties, one of which is fully affordable and the rest are geared at the Lifestyle segment. Completion is slated for this fall for all properties. The occupancy rate in stabilized properties stood at 93.3 percent at the start of 2020, while the average rent clocked in at $1,294.
One of the most active developers in the submarket, which also has the largest assets underway, is local firm W3. The company has 1,008 units under construction in two communities, anticipated to open during the first half of the year. The largest of the two—The Mansions at Spring Creek—is located at 6221 Naaman Forest Blvd. and totals 560 units with floor plans that range from one- to four-bedroom apartments. The project is built with a construction loan of $42 million funded by Wells Fargo Bank and due in July this year and was 97 percent occupied in March.
The beating heart of DFW, the downtown submarket houses the nation’s largest urban arts district with some 68 acres dedicated to its development. Downtown Dallas is also the largest employment center in North Texas with more than 135,000 daytime workers. The area carries strong appeal for developers, which currently have 2,805 units in 10 properties under construction. Despite elevated levels of supply, the occupancy rate in stabilized properties fell only 100 basis points year-over-year to 93.4 percent in January.
Florida investor ZOM is the most active developer in the submarket with two properties underway totaling 416 units: the 364-unit Atelier at 1801 North Pearl St. and the partially affordable 52-unit Flora Street Lofts at 2121 Flora St. The larger of the two is a mixed-use project with 15,000 square feet of retail space. The community is being built with help from a $15 million loan originated by a private lender and is slated for completion in early 2021.
2. North Carrollton/The Colony
The submarket extending along the eastern shoreline of Lewisville Lake has a particular appeal to both residents and developers alike. Developers work here on bringing online 2,967 units in nine communities, all of them targeting the Lifestyle renter. Demand for multifamily units in the region is high with the occupancy rate in stabilized properties rising 40 basis points year-over-year to 93.0% in January.
Bright Realty has three communities underway, which combined total 644 units: The Cottages at the Realm, a 72-unit asset, and the 312-unit Discovery at the Realm Phase II share the same address at 3600 Windhaven Parkway. The third, Valor at the Realm, totals 260 units at Castle Hills Drive & Windhaven Parkway. The last two have been subject to construction loans of $43 million each, with First United Bank & Trust Bank and Truist Bank, respectively.
Larger than all these three communities combined is Billingsley Co.’s Thousand Oaks at Austin Ranch Phases VII & VIII. The property totals 708 units and is located on nearly 6 acres at 6900 Summer St. For its construction Texas Capital Bank issued a $41 million loan due in August 2021.
1. North Frisco/West McKinney
At the start of 2020, when the occupancy rate in stabilized properties stood at 94.5 percent, developers had 5,382 units in 15 properties underway. Considering the area’s bustling employment opportunities in high-paying sectors, all projects under construction are Lifestyle assets.
The most active developer in the region is Columbus Realty Partners with 1,783 units in four communities underway. Three of these projects—which total 1,625 units—are phases of the initial Parkside at Craig Ranch, a 751-unit property built in two phases, in 2014 and 2016, at 6130 Alma Road. Phases III and IV, comprising 408 and 382 units, respectively, are slated for completion in the first half of this year and in September posted occupancy rates of 99 and 96.3 percent, respectively. Columbus Realty Partners’ largest development in the submarket is the project consisting of the fifth and sixth phases of Parkside at Craig Ranch, which will boost inventory by another 835 units upon their 2022 delivery.
Another developer with a full plate in the area is Davis Development, which has 919 units in two communities underway. The largest is the 668-unit Vale Frisco at 12050 Research Road, anticipated to open in late 2022. The project has a $38 million construction loan issued by Texas Capital Bank due in October 2022. The developer’s second property underway in the submarket is the 251-unit The Adley Craig Ranch at 8951 McCutchins Drive. The one- and two-bedroom community is in the leasing phase.
Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects developments underway within that sample group.