dallas / fort worth multifamily outlook

DALLAS / FORT WORTH MULTIFAMILY OUTLOOK
3RD QUARTER REPORT – 2013
INSIDE THIS ISSUE
ADDING INFRASTRUCTURE.................... 2
DEVELOPMENT HIGHLIGHTS.................. 4
OVERALL D/FW MARKET........................ 6
CONSTRUCTION PIPELINE..................... 7
Real Estate
Investment Services
STRENGTH IN NUMBERS
Having recovered and exceeded prerecession job levels, the Dallas/
Fort Worth Metroplex continues to see significant job growth. The
Metroplex added 111,000 jobs year-over-year as of August, a growth
of 3.7%. As a result of Dallas/Fort Worth’s business friendly climate
for jobs and investments, the Metroplex has seen a migration of
highly skilled workers, a trend that forecasters predict will continue
throughout the foreseeable future. According to Penske moving
company, Dallas/Fort Worth is the second most popular moving
destination in the country. This has made for a fundamentally sound
and robust multifamily sector. In the third quarter, Dallas/Fort Worth
hit a 12-year high of 94.4% occupancy. Annual rent growth was strong
as well, registering at 3.4%. MPF Research projects that demand will
total over 11,470 units next year. In anticipation, 92 projects totaling
approximately 14,600 units are currently under construction, with a
scheduled delivery in the next four quarters.
3Q2013
MULTIFAMILY OUTLOOK
ADDING INFRASTRUCTURE
THE CHISHOLM TRAIL PARKWAY
The Chisholm Trail Parkway (CTP) is a 27.6 mile toll road that will connect downtown Fort Worth to
southwest Fort Worth, continuing south to Cleburne. This will provide an alternative route to I-35W and
drastically improve traffic conditions in the area. The project is a collaboration between the North Texas
Tollway Authority (NTTA), Texas Department of Transportation (TxDOT), the North Central Texas Council of
Governments (NCTCOG), Tarrant and Johnson counties, the cities of Fort Worth, Burleson, and Cleburne,
Fort Worth and Western Railroad (FWWR), and Union Pacific Railroad (UPRR). The CTP is more than 40
years in the making with an estimated cost of $1.4 billion. Completion is projected to be mid-summer 2014.
In November, the newly constructed Rosedale/Lovell bridge opened and traffic was rerouted in order to
demolish the existing bridge. The I-20 bridge is currently under construction and expected to be finished
in the spring.
Source: www.ntta.org
2
Real Estate
Investment Services
THE NORTH TARRANT EXPRESS
The North Tarrant Express (NTE) consists of multiple major highways that connect Dallas and Fort Worth
through the Mid-Cities. Recent efforts to overhaul the infrastructure have given the Metroplex a true “facelift”. This 13.5-mile project will cost an estimated $2.5 billion once it is completed in 2015. NTE Mobility
Partners, in close collaboration with the Texas Department of Transportation, is heading up the project
which is employing 2,000+. Rebuilding the general purpose lanes, improving/expanding the frontage lanes,
and adding four toll lanes will provide relief from traffic congestion while driving through this area.
Source: www.northtarrantexpress.com
Source: www.northtarrantexpress.com
LBJ EXPRESS PROJECT
In 2008, traffic counts for LBJ Freeway were estimated at 270,000 vehicles per day. By 2020, demand is
expected to increase to 500,000 vehicles per day. To accommodate the traffic increase, construction began
in 2011 on the $3.1 billion LBJ Express project, a project that will incorporate dramatic improvements to
Interstate 635 and Interstate 35E. Meridiam Infrastructure and LBJ Infrastructure Group LLC, led by Cintra
US, are spearheading this 13-mile project which will feature rebuilt main lanes, a continuous frontage road
system, and TEXpress Lanes. TEXpress or ‘managed lanes’ will have adjusting tolls based mainly upon
traffic congestion. These lanes will give drivers the option of trading a higher toll for a reliable, predictable
trip through this frequently congested corridor. Estimated completion is late 2015.
Source: www.lbjexpress.com
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DALLAS / FORT WORTH MULTIFAMILY OUTLOOK | 3RD QUARTER REPORT
DEVELOPMENT HIGHLIGHTS
INTOWN DALLAS
The Intown Dallas submarket, inclusive of Uptown, has experienced exceptional growth. In the last four
quarters, 2,315 units were delivered. Another 2,836 units are currently under construction, making this
submarket one of the hottest in the Metroplex. The Intown Dallas submarket appeal can be seen in the
numbers, occupany is currently 95.4% while averaging $1.59 per square foot in rent.
FORT WORTH’S SUNDANCE SQUARE PLAZA
Construction on Sundance Square Plaza, an addition to Sundance Square, is underway. The project, with
scheduled openings in 2013 and 2014, includes three Class ‘A’ buildings with enough space to accommodate
for offices, stores, and restaurants. Two of the three buildings, The Westbrook and The Commerce building,
opened in October, adding 176,000 SF. The Cassidy building, 99,000 SF, will open in 2014. This area will be a
significant addition to Sundance Square and is sure to be one of the premier gathering places in downtown
Fort Worth.
SH 121 / DALLAS NORTH TOLLWAY CORRIDOR
The SH 121/Dallas North Tollway corridor is currently one of the hottest stretches of highway in the Metroplex.
Nebraska Furniture Mart broke ground in September 2012 as part of a 433-acre retail/industrial complex
along SH 121, between the Plano and West Spring Creek Parkways. The retail portion will anchor the
complex when it opens in 2015 with a 90-acre footprint and a 1.86 million SF building. The furniture store
will be the largest in the nation and will call for approximately 4,000 construction jobs. Upon completion it is
forecasted that 2,000 new permanent jobs will be created, attracting an estimated eight million visitors to
the area each year, which forecasters say will grow annual sales 7%. Top Golf, a premier golf entertainment
complex, opened last month. The facility, which features 4,000 SF of private event space, will attract
350,000 visitors in the first year alone, create hundreds of jobs, and attract other popular franchises to the
area. Also along SH 121 is Lewisville Town Crossing shopping center which features business powerhouses
such as Target, Best Buy, 24-hour Fitness, and PetSmart, with Walmart, Staples, and Home Depot.
Source: MPF Report
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Real Estate
Investment Services
THE PLATINUM CORRIDOR
The ‘Platinum Corridor’ is an area coined such due to its prime location in Dallas and Plano. Bounded
on the east by Preston Road, the north at SH 190 / President George Bush Turnpike, west by Midway
Road, and south by Interstate 635 / LBJ Freeway, this area is home to several major employment centers
including Legacy Business Park, the Dallas North Tollway corridor, the SH 190 corridor, Granite Park, and
the International Business Park.
Legacy Business Park, which includes The Shops at Legacy, continues to garner attention from
developers. The business park is home to some of the world’s largest companies – EDS, The Frito-Lay
Company, Countrywide Home Loans, Ericsson, McAfee, Inc., Pepsico, Intuit, and AT&T. To support these
companies, there are over 2,700 apartment units in the immediate area with another 978 units under
construction. With the growth and success of the area, the city of Plano has garnered recent accolades
such as, “#1 Best City to Build Personal Wealth”, “100 Best Places to Raise a Family”, and “Best Places in
the Dallas/Fort Worth Metroplex to Live”.
THE PLATINUM CORRIDOR
Office
Building
Address
Developer
Rentable
SF
Floors
Frisco Station
Warren parkway & North
Dallas Pkwy, Frisco
Hines
200,000
4
Hall Office Park
3001 Dallas Parkway,
Frisco
Hall Financial Group
200,000
8
$30 - $32 + E
Completed
Granite Park IV
5850 Granite Pkwy, Plano
Granite Properties
304,500
12
$24 - $25 NNN
May-14
Dominion Lagacy Office
Center
8383 Dominion Pkwy,
Plano
Nyers & Crow
Company
92,250
2
$18.75/SF Net
August-14
Legacy Business Park
5151 Headquarters Drive,
Plano
Primera Companies
51,333
3
$28/SF + E
Completed
Legacy Town Center
7800 North Dallas Pkwy,
Plano
Randy Heady &
Company
157,800
6
$29.5 + E
Completed
Legacy Center
5415 Legacy Drive,
Plano
Haggard/Cawley
Partners
150,000
4
$27/SF + E
Planned
Legacy Tower
7250 Dallas Pkwy, Plano
Trammell Crow
Company
342,006
13
$28/SF NNN
August-14
Lincoln Legacy II
6000 Tennyson, Plano
Lincoln Property
Company
132,000
8
$24 - $26/SF NNN
August-14
Windhaven Place I
North Dallas Pkwy &
Windhaven, Plano
Haggard/Cawley
Partners
200,000
8
$32/SF + E
Planned
Parkway Pointe II
North Dallas Pkwy &
North of W Plano Pkwy
Hines Development/
Jesse Pruitt
210,000
4
$26.50/SF + E
Planned
6111 West Plano
Parkway
6111 West Plano Pkwy,
Plano
Billingsley Company
80,000
3
$23.75/ SF + E
June-14
Bush & Tollway
PGB Turnpike & North
Dallas Tollway
Billingsley Company
235,000 - 375,000
(4 Buildings)
6
Planned
Bush & Midway
PGB Turnpike & Midway
Rd
Billingsley Company
150,000 - 250,000
(5 Buildings)
3
Planned
Knoll Trail Plaza
Westgrove Drive & North
Dallas Tollway
Cawley Partners
120,000
4
Quoting
Completion
Date
Planned
$26/SF + E
November-14
Source: MPF Research (3Q2013); http://www.grandscape.com
5
DALLAS / FORT WORTH MULTIFAMILY OUTLOOK | 3RD QUARTER REPORT
OVERALL D/FW MARKET
The D/FW Metroplex is the fourth largest metro area in the nation with a population of more than 6.5
million. The Dallas/Fort Worth/Arlington MSA is one of the fastest growing urban metro areas in the country
and boasts an unemployment rate of 6.0%, well below the national average. The Metroplex has enjoyed
carefully planned development, as evidenced by the varied economic base of information technology,
telecommunications, oil and natural gas, financial services, retail, real estate, and manufacturing
opportunities, making the Metroplex a desirable location for jobs and investments.
Robust apartment construction continues throughout the Metroplex. During 3Q2013, Dallas delivered 3,879
units and Fort Worth 1,113 units, expanding the inventory base of D/FW by 2.0%. The overall metro
occupancy sits at 94.4% - 94.7% for Dallas and 93.6% for Fort Worth. Same-store rental rates rose
3.3% for Dallas and 3.9% for Fort Worth. Annual supply of 12,873 units was exceeded by demand which
registered at 15,934 units. Dallas was one of the nation’s top employment growth centers in the year ending
August 2013, ranking third in the U.S. for both absolute job change (78,900 positions) and proportional
growth (3.7%). Employment growth is projected to remain strong and market fundamentals are expected
to follow suit. Revenue growth should continue at around the 3% range and occupancy is expected to
tighten to 94.0%.
Source: MPF REPORT (3Q2013)
D/FW Combined Stats
7,000
6,355
6,000
94.4%
5,000
4,992
4,000
2,315
2,008
2,000
93.8%
2,447
1,917
1,000
93.6%
1,574
93.4%
0
-44
93.2%
-1,000
Q3_2012
Q4_2012
DFW Combined Occupancy
Real Estate
Investment Services
94.2%
94.0%
2,857
3,000
6
94.6%
5,843
Q1_2013
DFW Combined Supply
Q2_2013
Q3_2013
DFW Combined Demand
METROPLEX CONSTRUCTION PIPELINE
DALLAS
PROJECT NAME
UNITS
SUBMARKET
COMPANY
COMPLETION
DATE
Moda
263
1 - Intown Dallas
Alamo Manhattan
early 2014
Bulter Brothers Building
250
1 - Intown Dallas
Alterra International Holdings
2014/10 (Est)
South 500 Ervay
250
1 - Intown Dallas
Alterra 500 South Ervay LLC
2014/12
Cantabria at Turtle
Creek
249
1 - Intown Dallas
Associated Estates Realty Corp.
2015/01 (Est)
3700M
381
1 - Intown Dallas
Forest City Enterprises Inc.
2014/11
McKinney Routh (Whole
Foods)
225
1 - Intown Dallas
Gables Residential
2014/12 (Est)
Elan Citylights
425
1 - Intown Dallas
Greystar
NA
Cedar Springs at the
Katy Trail
299
1 - Intown Dallas
JLB Partners
2015/04
Skyhouse
336
1 - Intown Dallas
Novare Group
NA
The Taylor
308
1 - Intown Dallas
StreetLights Residential
2014
Patriot Tower
210
1 - Intown Dallas
Todd Interest
2014/08
Alexan Arts
368
1 - Intown Dallas
Trammell Crow Residential
2015/07
The Alexan Skyline
365
1 - Intown Dallas
Trammell Crow Residential
2015/08
Aura Wycliff
301
1 - Intown Dallas
Trinsic Residential Group
2013
Lone Star Gas Lofts
123
1 - Intown Dallas
Hamilton Properties
2013/12 (Est)
Residences at CityPlace
396
1 - Intown Dallas
The Hanover Company
2014/02
Dwell at Turtle Creek
244
2 - Oak Lawn / Park Cities
Associated Estates Realty Corp.
2015/01
Gallery at Turtle Creek
347
2 - Oak Lawn / Park Cities
Columbus Realty Partners
2013
iLume Park
232
2 - Oak Lawn / Park Cities
Crosland Group
2013/12
Arpeggio Victory Park
378
2 - Oak Lawn / Park Cities
Mill Creek Residential Trust LLC
2014/10
Knox Park Residences
208
2 - Oak Lawn / Park Cities
Mill Creek Residential Trust LLC
2014/05 (Est)
Cedar Pointe
215
2 - Oak Lawn / Park Cities
NRP
2014/08
Alexan Fairmount
299
2 - Oak Lawn / Park Cities
Trammell Crow Residential
2014/04
Aura Medical District
325
2 - Oak Lawn / Park Cities
Trinsic Residential Group
2014/12
Trinsic Wycliff
301
2 - Oak Lawn / Park Cities
Trinsic Residential Group
2014/01
Strata
311
3 - East Dallas
JLB Partners
2014/04
The Bluffs in the Village
322
3 - East Dallas
Lincoln Property Company
2013/12
Landmark on Lovers
336
3 - East Dallas
Carbon Landmark Development
2014/01
The Tradition-Lovers
Lane
202
3 - East Dallas
Tradition Senior Living LP
2014/08
Lancaster Urban Village
193
5 - Southeast Dallas
Catalyst Urban Development
2014/03
1400 Belleview
164
5 - Southeast Dallas
Matthews Southwest
2013/11 (Est)
Alexan Trinity
166
5 - Southeast Dallas
Trammell Crow Residential
2014/06
The Canyon in Oak Cliff
480
6 - Oak Cliff
Straford Capital Partners, L.P.
2014/05
Sylvan I Trinity
201
6 - Oak Cliff
Wood Partners
2014/06
7
DALLAS / FORT WORTH MULTIFAMILY OUTLOOK | 3RD QUARTER REPORT
DALLAS
PROJECT NAME
UNITS
SUBMARKET
COMPANY
COMPLETION
DATE
Magnolia at Bishop
Arts
38
6 - Oak Cliff
Magnolia Property Company
2014/03
Encore 6162
288
7 - Northwest Dallas
Encore Enterprises
2014/07
Maple District Lofts
342
7 - Northwest Dallas
Lang Partners LLC
2015/04
Lincoln Royal
281
7 - Northwest Dallas
Lincoln Property Company
2014/06
Alexan Medical District
343
7 - Northwest Dallas
Trammell Crow Residential
2013/10
San Rafael II
99
8 - North Dallas
Associated Estates Realty Corp.
2013/10
5225 Verde Valley Lane
309
8 - North Dallas
Criterion Development Partners
2015/01
200
9 - Northeast Dallas
Prescott Realty Group Inc.
2013/10
365
9 - Northeast Dallas
Prescott Realty Group Inc.
2014/12
Jefferson Center
360
10 - Richardson
TDI
NA
Bush Central Station
403
10 - Richardson
Zale / Corson Group
2015/03
281
11 - Garland
Columbus Realty Partners
2013/12
147
11 - Garland
Private Developer
2014/01
190
11 - Garland
Oaks Properties LLC
2014/07
354
13 - South Dallas County
Forestar Group Inc
NA
120
15 - Irving
Broomfield Investments
2013/11
481
16 - Las Colinas / Coppell
AMLI / Levitt Homes
2013
Aston at Las Colinas
386
16 - Las Colinas / Coppell
TDI
NA
Cypress Waters
670
16 - Las Colinas / Coppell
Billingsley Company
2014/08
Embrey Partners
2013/12 (Est)
Western Securities
2013/12
UDR Inc.
2014/01
High Street Residential
2014/02
UDR Inc.
NA
Lake Highland Town
Center
Skillman Street &
Merriman Pkwy
Parkside at Firewheel
Town Center II
Carriage Home on the
Lake
Oaks 5th Street
Crossing II
Forestar Uptown
Cedar Hill
Chateua at Wildbriar
Lake
AMLI at Las Colinas
Urban Center
Addison Keller Springs
353
Mustang Station
256
Fiori at Vitruvian Park
III
The Union at Carrollton
Square II
Savoye at Vitruvian
Park - Phase II
391
244
350
17 – Carrollton / Farmers
Addison
17 – Carrollton / Farmers
Addison
17 – Carrollton / Farmers
Addison
17 – Carrollton / Farmers
Addison
17 – Carrollton / Farmers
Addison
Branch /
Branch /
Branch /
Branch /
Branch /
SoCo15
279
19 - Plano
Southern Land Company
2014/08
West Plano Village
245
19 - Plano
AMLI Residential
2014/08
Coit Center
454
19 - Plano
Greystar
2014/11
Broadstone Round
Grove
216
20 - Lewisville
Alliance Residential Company
2014/08
Elan Lakeside
425
20 - Lewisville
Greystar
2014/04
Crest Manor II
288
20 - Lewisville
Crest Property Management
2014/08
Aura Castle Hills
316
20 - Lewisville
Trinsic Residential Group / Hunt Realty Investments
2014/03
Hebron 121 Station II
444
20 - Lewisville
Huffines Communitites
2014/07
Pine Prairie
590
20 - Lewisville
Westwood Residential Co.
2014 Q1
The Estates of Frisco
360
21 - Denton
Western Rim Property Services
2014/02
Gardens of Denton II
192
21 - Denton
Andrew Merrick Companies
2014/09
8
Real Estate
Investment Services
DALLAS
PROJECT NAME
UNITS
SUBMARKET
COMPANY
COMPLETION
DATE
190
21 - Denton
Carrolton Properties
2014/01
416
21 - Denton
Western Rim Property Services
2014/09
Greenlee Heights
15
21 - Denton
Private Developer
2013/12
The Woodlands
316
21 - Denton
Garrett Moore Company
2014/05 (Est)
Cool Springs at Frisco
Bridges II
290
22 - Frisco / Prosper
The Westwood Companies
2013/10
North Court Villas
134
22 - Frisco / Prosper
Songhai Development Company LLC
2013/10
Emerson at Frisco Market
Center I
410
22 - Frisco / Prosper
Silver Oak Multifamily Capital LLC
2015/01
Amalfi Stonebriar
395
22 - Frisco / Prosper
North American Communities
2015/09
The Avenues at Craig
Ranch
334
23 - Allen / McKinney
Davis Development
2013/11
Heights at Lake Forest
334
23 - Allen / McKinney
The Worthing Companies
2014/06
St Paul Square
211
23 - Allen / McKinney
Himalayan St Paul Ventures
2014/06
1300 Custer Road
444
23 - Allen / McKinney
TDI Real Estate Holdings LLC / Catlyn Capital Corp.
2014/12
UNITS
SUBMARKET
COMPANY
COMPLETION
DATE
Knights of Pythias Lofts
18
26 - Intown Fort Worth / University
Fort Worth Housing Authority
2013/10
The Phoenix
170
26 - Intown Fort Worth / University
Eisner Development Corp / Ventures Development
Corp
2013/10
Parkside at SoSeven II
229
26 - Intown Fort Worth / University
CDK Realty Advisors
2014/06
Lincoln Trinity Bluff II
256
26 - Intown Fort Worth / University
Lincoln Property Company
Hulen Place
240
26 - Intown Fort Worth / University
Carbon Landmark Development
Sedona Place II
172
32 - North Fort Worth
Versa Development LLC
2013/12
SageStone Village
306
32 - North Fort Worth
Hillwood Development LLC
2014/05
Enclave at HomeTown
260
33 - North Richland Hills/Haltom City
Integrated Real Estate Group
2013/12
Dolce Living Hometown
315
33 - North Richland Hills/Haltom City
Dolce Living Hometown LLC
2014/12
Glade Parks
417
34 – Hurst / Euless/Bedford
JLB Partners
2014/07
Grapevine Station Lofts
273
35 - Grapevine
North American Properties
2013/12
Enclave at Grapevine
243
35 - Grapevine
Integrated Real Estate Group
2014/03
Dolce Living at Burleson I
240
36 - Johnson County
Dolce Living Homes
2013/12
Mansions at Hickory
Creek
The Mansions by the
Lake
Fort Worth
Project Name
Total Units – 27,361
2014/07
Source: MPF Report
2014/11
Total Deals Under Construction – 94
Source: ARA Internal Database; MPF Research (3Q2013); ALN; Pierce-Eislen
9
DALLAS / FORT WORTH MULTIFAMILY OUTLOOK | 3RD QUARTER REPORT
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