Commercial Real Estate in Dallas-Fort Worth: Strong Apartment Market Trends

Dallas and Fort Worth form the heart of the fourth largest metropolitan area in the United States, a sprawling conglomerate of cities and towns that is home to more than 7 million people.

The Dallas-Fort Worth (DFW) area is a worldwide economic center. DFW International Airport is the third busiest airport in the world by aircraft movement. The region hosts 22 Fortune 500 company headquarters, up from 18 in 2014, as well as dozens of smaller national companies familiar to American consumers. These include Exxon-Mobil, AT&T, American Airlines, Kimberly-Clark, Texas Instruments, J.C. Penney, Dr. Pepper Snapple Group, 7-Eleven, Frito-Lay, and many more. There also are more than 40 institutions of higher education throughout Dallas-Fort Worth, as well as many noteworthy museums and cultural institutions.

As a growing metropolis with a robust economy supporting extensive job growth and development, Dallas-Fort Worth remains an area with strong real estate investment opportunities.

Roaring Multifamily Construction in DFW

Dallas-Fort Worth’s economic success is reflected in its real estate market. Multifamily housing construction is proceeding at a pace that is exceeded only in the New York City area. Dallas-Fort Worth is projected to add 100,000 new renters over the next five years.^[1]

As of mid-2017, there were 50,000 apartments under construction in the Dallas-Fort Worth area, including 12 high-rises going up in central Dallas.^[2] About 30,000 units are expected to enter the market in 2017.^[3]

Even with this significant amount of new supply, vacancies are only projected to rise to 5.3% by the end of 2021.^[4] To put this into perspective, in 2016, only 11,567 units were completed.^[5] Development activity is spread throughout the region, but it is most heavily concentrated in central Dallas and the northern reaches of the metro area.

The health of the market can also be appraised by strong average area rents which increased by an impressive 6% in 2016 and by roughly 25% from 2011 to 2016.^[6]

Job Growth Increasing Demand for Multifamily Communities

Job growth is a major force fueling demand for multifamily housing in Dallas-Fort Worth. The area saw 4.2% job growth in 2016, compared to 1.6% nationwide.^[7]

Gross domestic product growth of 3.3% in Dallas-Fort Worth in 2016 more than doubled the national rate, and it leads the country in office completions, with 20.5 million square feet of office space coming between 2017 and 2019.^[8]

In affluent Plano, the new $3.2 billion, 255-acre Legacy West mixed-use development will soon be home to offices of Toyota North America, Liberty Mutual Insurance, JP Morgan Chase, and other major companies.^[9] Elsewhere in Plano, the old Texas Instruments campus is being converted into Legacy Central. That development will include at least 700 apartments.^[10]

Investing in Luxury Apartments in Dallas-Fort Worth

Dallas-Fort Worth is a sterling example of successful development during rapid growth. The construction market is not expected to let up in the foreseeable future, and we believe the secondary market will remain tight until a new cycle of sales emerges. In our option, even against the backdrop of the dynamic growth throughout the South, the Dallas-Fort Worth area offers exceptional opportunities for investment in multifamily development and real estate.

CWS Capital Partners has a strong presence and extensive experience in the Dallas-Fort Worth multifamily real estate market. Our experts can help you invest in an existing property or new development, or make a 1031 exchange. Contact us today to get started. To learn more about our Texas properties, please visit our affiliated CWS Apartment Homes website.

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.