Our northern suburban apartments – rents way up… occupancy down… new unit leasing taking time
Since the start of 2012, Class A apartment rents are up roughly 30 percent across our northern suburbs.
December 11, 2018
- Since the start of 2012, Class A apartment rents are up roughly 30 percent across our northern suburbs. This is a similar increase to Class A units in DFW overall.
- These units had been running “full” at 95 percent occupancy. Today, occupancy has declined significantly.
- From 2016 to today, almost 21,000 new market rate units have been delivered in the northern suburbs to accommodate the significant job growth that has taken place, especially in greater Legacy and around Cityline.
- The newest units carry a notable rent premium. DNT properties are 12 percent above Class A, or $150+ per month – and US 75 assets, while more modest, are still 6 percent and $80 per month higher.
- Importantly, the rapid increase in rents from a few years ago has slowed dramatically, as “affordability” at these top-end rents may have been reached – at least for the moment until the market adapts.
- New property lease-up is also slow, requiring extended periods to stabilize – sometimes more than 2 years – and has resulted in some assets “de-leasing” slightly as new projects deliver and compete for residents.
- For the new DNT and US 75 projects, the average pace is 18 to 19 units per month. This means the typical project requires 18 months to hit 90 percent occupancy, impacting base rents, concession burn-off, and rent growth.
Source: MPF; CoStar; JLL Research