TEXAS SNAPSHOT, DECEMBER 2005

Fort Worth Multifamily Market

There is an emergence of urban development and downtown revitalization in the inner core of the Fort Worth multifamily market, according to George Deuillet III, senior investment advisor with Hendricks & Partners. “Developers are banking partly on an aging baby-boom population, many of whom are empty nesters and are desiring more dynamic living arrangements,” he says. “Developers seem ready to move forward with large mixed-use developments, urban-infill projects and luxury high-rise condominium conversions. With the conversion of an abandoned office tower at 500 Throckmorton into luxury condominiums, the success of Sundance Square and its residential, commercial and retail offerings, along with the master planned mixed-use Trinity River development, Fort Worth is moving full speed ahead with an urban living movement of its own.”

The majority of multifamily development currently is taking place near Fort Worth's downtown areas due to population migration, affordability and quality of life, Deuillet says. Developments such as the Trinity River Development, Sundance Square, Tandy Center Renovation and The Tower @ 500 Throckmorton are examples of this trend.

In the second quarter of 2005, Fort Worth saw a moderate volume of multifamily development activity. There were three subsidized/low-income apartment communities completed for a total of 746 units; four apartment complexes finished with a total of 1,016 units; one condominium development (The Tower) with a total of 298 units; and one senior living development completed with 203 units. Despite an active quarter, however, development activity within the Fort Worth multifamily market is easing somewhat. Two apartment communities are still under construction with a total of 440 units, and four more apartment and two senior housing developments are planned for construction with a total of 1,265 units in the next 2 years, significantly down from prior years. “With unit absorption improving, the outlook for continued occupancy improvements is very positive,” Deuillet says.

Average rental rates in Fort Worth's multifamily market have increased during the past 2 years, while vacancy rates have been relatively stable, remaining near 10 percent. Rents are expected to continue rising as vacancy rates decline, existing supply is converted to condominiums, and absorption increases in relation to new construction.

Job growth in the Dallas/Fort Worth region should continue to pick up as the local economy rebounds further in the years ahead. “The Metroplex provides a diverse employment base not oriented to just one industry, thus it is considered a potentially more stable economic engine versus other major cities that rely more heavily on one industry,” Deuillet says. “The cultural district west of downtown will continue to be very active in condominium conversions as the regentrification of the area brings in developer interest.”

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