DFW Multifamily Rebound Tempting Investors

DALLAS-The Dallas-Ft. Worth multifamily market’s rebound will spike sales prices 3.2% on the average over the course of the year as the region sheds an overbuilt reputation, assesses Marcus & Millichap in its latest report.

Matthew Fitzgerald, regional manager for the California-based Marcus & Millichap, tells GlobeSt.com that “Dallas is on the radar screen for most of the institutional investors.” Top-of-the-line properties are bringing roughly $80,000 per unit, low in comparison to other major metropolises. “$80,000′s not going to get you a class A unit in LA,” he says. Los Angeles multifamily properties are drawing better than $110,000 per unit while Northern California holdings are fetching over $200,000 per unit, he says.

Fitzgerald’s team is right on the mark for where the DFW region had been and where it’s going. In the Marcus & Millichap midyear report, first-quarter sales were down to $98 million versus $232 million for the same period in 2000. But, sales will pick up as the year’s end draws closer. The first quarter’s limited class A sales caused the average per unit price to dip to $41,000 as investors bought older properties with an eye on renovation and rent hikes to bolster coffers, according to the report. “The tide has turned and the outlook is positive,” conclude researchers.