Multifamily

By Kevin Leamy, senior vice president, debt & equity, Northmarq Dallas-Fort Worth (DFW) has been one of the hottest multifamily markets in the country over the past five years. And as the area’s growth pushes further north, developers and investors are finding plenty of liquidity to support transactions. The northern DFW suburbs experienced a huge inflow of people over the past several years. The growth to suburbs such as Addison, Richardson, Plano, Frisco and McKinney gained even more traction during the pandemic. An increasingly diverse employer base and corresponding job growth are attracting people and driving demand for both for-sale homes and multifamily units. Instead of making a long commute into downtown Dallas or Fort Worth, there are now several big employers in North Dallas that offer high-quality jobs. One key catalyst for expansion was the opening of Toyota’s North American headquarters in Plano five years ago. The 100-acre campus is home to more than 4,000 employees. Other major corporations have followed, including the newly opened regional headquarters for J.P. Morgan Chase. Another factor drawing new residents to the area is strong schools, including a reputation for some of the best elementary and high schools in the country. Multifamily developers …

By Taylor Williams First things first: By most objective metrics and standards, multifamily assets in major Texas markets still represent strong investment propositions relative to certain other commercial sectors, as well as to the stock market, the other long-term vehicle to which real estate investments are most commonly compared. But as we cross the midpoint of 2022, the U.S. economy finds itself awash in a unique combination of challenging and extreme circumstances. Mainstream news coverage increasingly includes the word “record” in reports on inflation, one-off interest rate hikes and movement in the 10-Year Treasury yield. The yield on two-year Treasury notes recently eclipsed that of the 10-year, creating the “inverted curve” that has historically been an indicator of an upcoming downturn. Rumblings of an imminent recession grow louder by the day. Fear is contagious, and some markets are already showing signs of hunkering down in anticipation of a downturn.  The expectation of recession, let alone the materialization of it, impacts even the strongest of markets, including multifamily assets in Texas. Investors and brokers who specialize in the property type recognize that certain factors — net in-migration of hundreds of thousands of people per year, exceptional corporate relocation activity, and supply …

By John D. Hutchinson, vice chairman, global head of origination, Trez Capital The COVID-19 pandemic brought mass migration to the Sun Belt states, and by far, the most sought-after location of the pandemic migration boom was Texas. Multifamily investment demand remains strong due a higher quality of living, affordability and job growth. People are leaving high-tax, high-regulation states and moving to states like Texas with lower taxes and more favorable business climates.  Austin, specifically, has outshone the top cities in the “Texas Triangle” with its large influx of both people and jobs. Austin’s exponential population growth, attractive cultural qualities and high-income jobs have created demand for  and premium prices on real estate. Although the U.S. economy has seen changes in the last couple of months, such as inflation and interest rate hikes, the city still affords a great opportunity for multifamily investors. According to data from CoStar Group, Austin has doubled its construction starts over the past year and is expected to add 15,827 new units in 2022. In fact, there was a record 25 percent rent growth and strong occupancy at the end of 2021.  A Growing Market In 2021, the Austin area’s net population growth was about 16 …