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If you think there are a lot of apartments under construction in North Texas, well, you’d be right.
More than 37,000 new rental units are in the works in the Dallas-Fort Worth area — the top apartment building total in the country.
Unlike in previous building wave, when most of the apartment activity was concentrated in a few locations, this time around rental communities are being built in almost every section of the metro area. And more apartments are being built in the suburbs than in high-profile locations in Uptown and downtown Dallas.
Central Dallas still has a slight edge, with more than 3,600 apartments in the building pipeline in the first quarter — the most of any D-FW district.
But Frisco is closing in with almost 3,400 rental units on the way. And more than 3,200 new apartments are being built in Carrollton and Farmers Branch.
"Activity continues mainly in the spots where building has been heavy throughout this cycle," said Greg Willett, chief economist at Richardson-based RealPage. "Perhaps the most notable exception is the pocket west of the Dallas North Tollway and Galleria area over into Farmers Branch.
"That area is moving up the list, pulling ahead of places like Richardson and Las Colinas," Willett said.
Las Colinas is still on the list of top local apartment building markets.
Hundreds of new rental units are being built in neighborhoods in Grapevine, Southlake, southwest Dallas and Hurst-Euless-Bedford, too.
"The five neighborhoods leading construction at any point in time tend to account for about 42% of the total," Willett said.
The vast majority of apartments being built in North Texas are outside the core urban areas. That’s an eye-opener because many suburban communities are increasingly hostile toward apartment development and higher construction density.
But it’s a good thing that all those rental units are coming.
The D-FW area was the country’s top population growth center last year, with more than 130,000 new residents driven by the migration of people to the area seeking jobs. The majority of the more than 80,000 people a year moving to North Texas are in their 20s and early 30s — the prime renter demographic.
We need all those apartments to put a roof over those newcomers’ heads.
During the 12 months ending with the first quarter, almost 19,000 new apartment units opened their doors in D-FW. That was second only to the New York metro area, according to a new study by CBRE.
"Nearly half of all new supply was delivered in just eight markets, led by New York, Dallas-Fort Worth, Los Angeles and Seattle," CBRE analysts said.
Many of the best apartment building sites are already taken. And those that remain are getting more expensive.
"In today’s market, you really need to be creative with your site selections, and you need a lot of patience working through entitlement and zoning issues," said Spencer Stuart, senior managing director with builder Legacy Partners. "Sites are tighter; projects are more complicated and take more time to build."
Even with rising construction costs, the pushback from suburban homeowners and fewer easy building sites, don’t expect a significant slowdown in D-FW apartment building in the year ahead.
As long as job growth and population gains in the area continue, the demand for new apartments will remain strong.