From sophisticated high-rises to hip urban flats, Downtown is a one-of-a-kind destination for those seeking multifamily options with maximum amenities. Here, we’ll outline some of the biggest developments of the last year and discuss how Dallas has gained distinction in all areas of apartment living.
Downtown Dallas offers a variety of rental, condominium, and attached single-family products.
As of today, the Dallas-Fort Worth market reports over 30,000 multifamily units under construction, with over 300 of those in Downtown Dallas.
In addition to those under construction, Downtown saw a total of 556 new units delivered in 2021.
Companies continue to relocate and expand in the North Texas market creating inordinate demand for housing and setting vacancy in the region at a staggering 5.7%. Renters won’t be without options for long; as multifamily starts are popping up at a rapid clip since the short, pandemic-driven lull.
Downtown properties follow suit reporting a low 5.5% vacancy amongst stabilized properties. CoStar reports a concession rate of 2.07% in Q4 after peaking at 4.5% in Q1 of 2021.
Our newest luxury structures, The East Quarter Residences, The Atelier, The National, and AMLI Fountain Place, are seeing increased leasing activity and are filling up quickly. We should see Matthews Southwest’s Galbraith, a mixed-use high-rise next to the historic Dallas High School building, deliver by mid-year 2022.
Demand for Downtown properties remains high and potential tenants have a variety of stock to choose from. The Downtown residential market continues to provide a broad range of rents from below $1.50 per square foot to over $4 per square foot across a range of properties. Last year closed with an average asking rent of $2.17 per square foot across all Downtown properties. This increased 17 cents from Q1’s $2 per square foot. Currently, the average one-bedroom Downtown is asking $1,739, $204 more than Q4 2020.
The East Quarter Residences recently opened at 300 Pearl in the East Quarter. This amenity-rich building offers tenants a myriad of luxuries, including an 8th floor pool deck with cabanas and sky lounge. Tenants will also enjoy the Volta fitness center, on-site dog spa and park, conference rooms, and a bocce ball court.
Coastal migrants continue to fuel occupancy in Downtown residential structures through the pandemic.
The fourth quarter Southwest Economy report from the Federal Reserve Bank of Dallas revealed that migration to Texas increased during the past two years. In fact, the number of individuals migrating to Texas from California (our state’s largest population feeder) nearly doubled from 34,000 to 64,000 during the first 18 months of the pandemic.
DFW, by far, received the lion’s share of these new migrations, filling current building stock and fueling the well-publicized rises in area home prices.
Surrounding districts are showing a similar trend: Victory Park, Uptown, Old East Dallas, The Cedars, and Trinity Groves are reporting 92.5% occupancy and are set to deliver 512 units with many projects still in the planning phase.
Builders scrambled for permits as building material prices finally receded in 2021, but they are playing catch-up to record migration that is showing no signs of letting up.
New deliveries will continue to be an important data point to track. DFW’s job growth continued to excel throughout 2021 while residential construction lagged due to lingering pandemic issues. This increased demand, combined with a lull in construction, has resulted in increased rents that will remain high until new deliveries reach the market.
The Galbraith (2400 Bryan) is one of the major residential developments still underway with 230 planned units. Recently announced projects from Woods Capital and Todd Interests in the Main Street corridor will bring more residential units and higher density to Downtown. Mill Creek Residential will be building a ground-up project near the Dallas Farmers Market that will enhance an already active district.
Apartment occupancies will stay over ninety percent, rents will continue to increase, and concessions will stay low until new deliveries bring renters more options.