The Southwest had the largest share of luxury apartment buildings last year.
DALLAS—Three-quarters of the new apartment construction completed in 2015 were of the high-end variety. In 2017, the construction of luxury rental properties increased to 79% of all US apartment construction, according to RentCafe's most recent study on high-end apartment construction.
And, the trend continues in 2018–about 87% of all large-scale apartment buildings completed in the first half of this year are high end. When it comes to the total share of high-end apartment buildings, Charlotte ranks first, having built so many luxury residential properties that these multifamily communities now represent half of apartments in the city.
Not far behind is Austin with 45% of its rentals of high-end quality, while Dallas lands at number six with 35%, and Fort Worth sits at 11 with 31%. Looking at high-end construction by region, the Southwest had the largest share (88%) of luxury apartment buildings out of the total of rental developments in 2017.
“Given the strong economic growth, the Southwest region has witnessed an impressive increase in apartment construction over the years,” Florentina Sarac, RentCafe real estate writer, tells GlobeSt.com. “It's easy to see why the Southwest is leading in terms of luxury apartment construction, with some Texan metros standing out due to developers' high interest in the luxury segment.”
At a more granular look, luxury apartment construction in 2017 peaked in six cities including Dallas and Fort Worth. These are two of the six cities that had nothing but high-end apartments in 2017, as well as two of the 16 cities where all new apartments are luxury-grade in the first half of 2018 (100% share of high-end properties).
Out of the top 30 largest US metros, Dallas-Fort Worth along with the Houston metro occupy the third and fourth place with the highest shares of luxury buildings completed in 2017. High-end apartments in Dallas-Fort Worth metro represented 98% of the total rental developments. The Houston metro has also built exclusively luxury apartments in the first half of the year and in 2017.
“The most impressive growth, however, was witnessed by El Paso where in 2017, out of all new apartment construction, 56% was high end while in the first half of 2018, the city has built exclusively luxury apartments,” Sarac tells GlobeSt.com.
For more information on multifamily news, join GlobeSt.com at RealShare Apartments in Los Angeles from October 29-30, 2018. RealShare Apartments brings together the industry's top owners, investors, developers, brokers and financiers as they gather for THE MULTIFAMILY EVENT OF THE YEAR! This conference leverages the strength of ALM's Real Estate Forum and GlobeSt.com, which report daily on the multifamily sector. Register for RealShare Apartments.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
