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Will the Multifamily Market in Dallas Keep Surging Into 2022?

Published: 03-14-22 Category: Investing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

According to the North Central Texas Council of Governments (NCTCOG), over 350,000 jobs will be added to the population by 2030, along with 91,000 new households. This is the type of growth that has led to Dallas being nailed as one of the fastest growing metro areas in the country.

Dallas is an economic darling in the post-pandemic era; while other cities were losing jobs left and right during the pandemic, Dallas had less employment loss than other metro zones in the country.

Plentiful jobs for professionals, multiple amenities for families, and a strong business development ethos all join forces to make Dallas not just ideal for newcomers but also ideal for commercial real estate enthusiasts looking for new opportunities.

Will Dallas’s multifamily market keep surging through 2022 and beyond? All signs point to yes; key market trend evidence is included below.

The Multifamily Renaissance: Opportunity for Everyone

In business, any deal that benefits multiple parties at once should absolutely garner plenty of attention. Multifamily housing truly benefits a wide range of people. Property management companies can build systems for multifamily housing, freeing up personnel and making it easier to manage multiple properties for investor groups.

The benefits are clear regardless of where someone rests in the greater commercial real estate ecosystem:

Great return on investment.
Easy asset class to understand, transform, and resell.
Multifamily experiences are easy to customize for specific audiences.
Tax incentives from local government for building more units and focusing on low to moderate-income residents.
Strong property appreciation, especially as more people hold off on buying real estate of their own.

The merits of having commercial real estate that’s easy to explain, examine, and expand go beyond the benefits listed here. There’s an opportunity for everyone in multifamily, and it’s no surprise that multifamily housing is surging in a popular city like Dallas.

Approaching Multifamily For Sale in Dallas

Studying the market for multifamily reveals some interesting statistics. Multiple listings for multifamily units were priced as low as $270,000, and top listings were over $3 million. This range means that there really is something for everyone, especially when syndication deals are added into the mix.

Examining Big Multifamily Acquisitions in Dallas

The best way to see that Dallas’s hot multifamily market is here to stay is to look at some of the large institutional real estate firms and their purchasing habits recently. One of the big acquisitions of note took place in February with Pegasus Real Estate purchasing The Reinzi at Turtle Creek. The purchase price was not disclosed.

Western Wealth Capital is continuing to expand its multifamily portfolio in the greater Dallas area by picking up the Bel Air K Station Apartment Homes, a 245-unit property well placed near the DART rail station and other local attractions.

Polaris Real Estate Partners picked up Sylvan Thirty Apartments, a 201-unit multifamily building in West Dallas. This property is unique because it pairs retail space with multifamily development. Sylvan Thirty was built with tax increment financing incentives, which required a fifth of the available units designed specifically for affordable workforce housing.

Out of State Investors: A Good Sign for Multifamily’s Future

One of the most interesting insights from studying the acquisitions from Western Wealth Capital and Polaris Real Estate is that both real estate firms are not based in Dallas. Western Wealth is based in Canada with offices in Phoenix, and Polaris is based in San-Francisco.

When investors from out of state are coming in to pick up property, it’s time to pay attention. Conducting business outside of the home area comes with its own set of costs, legal details, and complexities. To see large real estate firms purchasing well outside of their home area demonstrates the value of the Dallas market.

Remote Work Drives Professionals to Consider New Spaces

The Great Resignation is still in full swing as professionals have the ability to decide where they’ll live instead of just where they’ll work.

The idea that professionals can work from anywhere is now being seen as a necessity in order to keep top talent. If one company wants to return to the office, another will advertise remote working as a way to get talented professionals to move to the company.

Dallas is becoming as large of a tech space as Silicon Valley or better, which means that IT professionals aren’t having to give up their careers in order to find fulfilling work. So even if remote work isn’t on the radar, they can relocate to a thriving city with lower house prices than Silicon Valley provides.

Multifamily Amenities Become Strong Draw for Young Professionals

It’s a given that priorities shift once people begin planning to have a family, but the priorities of young urban professionals also deserve further examination.

A stable income and a desire to socialize within their peer group creates a strong urge to live in spaces that include not just great amenities for entertaining, but a more inclusive experience.

Additional concerns include the ability to walk to popular venues and also be able to enjoy some green space. Multifamily housing satisfies these concerns by including the best amenities within the units, along with areas that are desirable for young professionals.

People want to be able to live somewhere that makes it easy to walk and soak up the sights and sounds that other people have to drive to see.

The Road Ahead for Dallas’s Multifamily Market

It is highly likely that Dallas’s multifamily market will continue to surge through the rest of 2022 and beyond. As people begin to migrate to other areas thanks to the rise of remote work, it is likely that we will continue to see plenty of people choosing to stay in multifamily housing for a few more years to come.

Potential homebuyers looking to climb the property ladder have to play their cards carefully in a hot market, where house prices continue to climb. It will be interesting to see what happens as house prices cool off, but it is unlikely that the market will slow down anytime soon when low inventory plagues markets like Dallas.

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