Regions
Southwest | Dallas
Jul 06, 2009
By: Erika Schnitzer, Associate Editor, Multi-Housing News
“Anyone who follows the multi-family market knows that Dallas/Ft. Worth has been the golden child of the multi-family industry for a while,” asserts Matt Summers, president of management at Kaplan Management Company Inc.
With increasing vacancy levels and rising concessions, the market has softened somewhat but occupancy remains in the 90 percent range. However, last year the market was enjoying 97 to 98 percent occupancy, says Summers.
“If you’re not managing the way you should be, [your property] will be affected by dwindling occupancies and increasing concessions,” Summers says.
While Summers notes that the shadow market, particularly from single-family homes, has not had much of an impact on the market, he does add that many projects that were originally intended to be condominiums have been converted into rental communities. These conversions are more prevalent in urban submarkets, he asserts.
Though market rents have not changed much, effective rents are on the decline due to concessions, which are currently at about two months’ free rent. One year ago, notes Summers, the market was seeing only about one month free rent.
Class-wise, A and B projects are outperforming Class Cs and Ds by approximately 5 percent in terms of occupancy levels—a comparison consistent with projects in Houston. (In Austin, Summers notes, Class B is performing 2 percent better occupancy-wise than Class A projects).
Within the next 60 to 90 days, Summers predicts, Dallas/Ft. Worth will experience a rise in occupancy with the usual summertime spike. He expects that after occupancy increases, it will flat line or decline slightly during the fourth quarter. While this trend may be typical, Summers notes that the usual “ramping up” took place one quarter later than usual.
As for growth potential in the marketplace, Summers notes a greater interest in management. People are paying more attention to their assets than ever before, he says. “We are seeing an increase in the boutique management companies, because what the special service provider is looking for is more personal attention…who will pay attention to the asset and make it perform until market conditions change.”
Despite all this, Summers warns against getting too wrapped up in the submarkets and comparing your property against those in other markets. Special service providers are now identifying those who know how to manage communities, which Summers says, will allow for a positive trend in performance, resulting in markets and submarkets faring better. “The best thing to do is run the property and assets the best you can,” he advises. “Making sure you are doing the fundamentals is what everyone needs to be focused on.”
By: Erika Schnitzer, Associate Editor, Multi-Housing News
“Anyone who follows the multi-family market knows that Dallas/Ft. Worth has been the golden child of the multi-family industry for a while,” asserts Matt Summers, president of management at Kaplan Management Company Inc.
With increasing vacancy levels and rising concessions, the market has softened somewhat but occupancy remains in the 90 percent range. However, last year the market was enjoying 97 to 98 percent occupancy, says Summers.
“If you’re not managing the way you should be, [your property] will be affected by dwindling occupancies and increasing concessions,” Summers says.
While Summers notes that the shadow market, particularly from single-family homes, has not had much of an impact on the market, he does add that many projects that were originally intended to be condominiums have been converted into rental communities. These conversions are more prevalent in urban submarkets, he asserts.
Though market rents have not changed much, effective rents are on the decline due to concessions, which are currently at about two months’ free rent. One year ago, notes Summers, the market was seeing only about one month free rent.
Class-wise, A and B projects are outperforming Class Cs and Ds by approximately 5 percent in terms of occupancy levels—a comparison consistent with projects in Houston. (In Austin, Summers notes, Class B is performing 2 percent better occupancy-wise than Class A projects).
Within the next 60 to 90 days, Summers predicts, Dallas/Ft. Worth will experience a rise in occupancy with the usual summertime spike. He expects that after occupancy increases, it will flat line or decline slightly during the fourth quarter. While this trend may be typical, Summers notes that the usual “ramping up” took place one quarter later than usual.
As for growth potential in the marketplace, Summers notes a greater interest in management. People are paying more attention to their assets than ever before, he says. “We are seeing an increase in the boutique management companies, because what the special service provider is looking for is more personal attention…who will pay attention to the asset and make it perform until market conditions change.”
Despite all this, Summers warns against getting too wrapped up in the submarkets and comparing your property against those in other markets. Special service providers are now identifying those who know how to manage communities, which Summers says, will allow for a positive trend in performance, resulting in markets and submarkets faring better. “The best thing to do is run the property and assets the best you can,” he advises. “Making sure you are doing the fundamentals is what everyone needs to be focused on.”
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