Insights

Buying_Investment_Property_in_Dallas_Best_Neighborhoods_and_Strategies_in_2018

Dallas-Fort Worth was one of the country’s most active multifamily real estate markets in 2016 and 2017, and it looks set to remain on the top of the charts in 2018 thanks to a thriving local economy fueling job and population growth.

 

Buying Investment Property in Dallas: Best Neighborhoods and Strategies in 2018

Feb 06, 2018

Dallas-Fort Worth was one of the country’s most active multifamily real estate markets in 2016 and 2017, and it looks set to remain on the top of the charts in 2018 thanks to a thriving local economy fueling job and population growth. Dallas-Fort Worth added the most jobs and had the highest job growth rate out of the 12 largest metropolitan areas in the year leading up to November 2017, adding 100,400 jobs. The primary industries driving this strong growth in Dallas are the manufacturing, hospitality, professional services, education and trade, transportation, and utilities industries.[1]

Development Continues in Dallas-Fort Worth

Home to over 7 million people, the Dallas-Fort Worth metropolitan area is enormous, encompassing over 9,000 square miles. Multifamily development is slowing down in the area, similar to the rest of the country, and rents are leveling off. But Dallas-Fort Worth is expected to remain one of the busiest multifamily real estate markets in the country, and is projected to need 266,000 additional apartments through 2030.[2] About 40 percent of the area’s population lives in apartments[3]—a significantly higher ratio than for most other cities. Furthermore, single-family homes in the area are continuing to show progressively “diminishing affordability.”[4] The disproportionate number of non-affordable homes being added to the Dallas market will likely increase residents’ propensity to rent. 

Market conditions are far from uniform. Arts and entertainment-oriented neighborhoods near the center of Dallas, such as Oak Cliff, Oak Lawn,[5] and Deep Ellum,[6] are experiencing a large influx of population as multiple large apartment projects are completed there. The city’s affluent suburbs to the north, including Lewisville, Richardson, Frisco, and Plano, are also centers of multifamily development. In these areas, 9,000 new units are planned for 2018, out of 25,000 scheduled for the entire metropolitan area.[7]

Many sections of the Dallas area are unrecognizable from only a few years ago. In Lewisville, for example, a 90-acre, 1,700-unit project that began in 2011[8] is entering its final phase, with completion due in 2019. Plano has undergone the most extreme transition, however. In 2014, there were open fields in Plano where the 38-acre multi-use Legacy West “urban village” stands today. Legacy West is home to offices of Boeing Global Services, Toyota, Liberty Mutual, and JPMorgan Chase, as well as to the 304-room Renaissance Dallas at Plano Legacy West hotel, 800 apartments, and a 55,000-square-foot food hall. To evidence how the area is rapidly urbanizing, a 29-story apartment tower is planned for the development in Plano.[9]

Reaction to ongoing development has been mixed. In Plano and Frisco, there is strident opposition to further multifamily construction from homeowners’ groups. This opposition is expected to have as large an impact as the current market cycle to limit new multifamily construction there.[10] In Dallas, the Oak Lawn Committee, established during the city’s building boom in the 1980s, is still a power to be reckoned with by developers.[11]

Other areas have embraced change. In Deep Ellum, an old neighborhood with a mix of blue- and white-collar residents, intensive multifamily construction activity is enthusiastically welcomed. “We are really excited about the residential density,” Jessica Burnham, executive director of the Deep Ellum Foundation, told the Dallas News. “That's what the neighborhood needs to be sustainable.”[12] 

The Dallas-Fort Worth Acquisitions Market Is Healthy

Multifamily assets worth $5 billion were traded in Dallas-Fort Worth in 2017,[13] and that market continues to be strong. Sales have ranged from smaller, older properties throughout the area to landmarks such as the Frisco Square development in Frisco. According to Yardimatrix.com, from November 2017 to January 2018, 13 properties totaling 1,206 units sold in North Dallas and the northern suburbs,[14] and six properties with 1,571 total units sold in the other parts of Dallas.[15] The market for newly completed multifamily properties and older properties suitable for repositioning is expected to remain active in 2018 as the local single-family housing market remains tight.

CWS Capital Partners owns 17 properties in the Dallas-Fort Worth area.

Please contact us to learn more about investing with CWS Capital Partners, or view our current offerings by completing our self-certification form for accredited or qualified investors.

 Contact_Us_(small)View_Offerings_Small 

 

The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.

All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.

Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.

Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.

 

If you would like to receive an e-alert when a new blog article is posted, please sign up below.

E-Alert Lists