Multifamily Ramps Up As Relocations Mount
In addition to a strong workforce, and rising labor and population rates, the business climate in Texas will facilitate further growth as companies move operations to the state, adding to multifamily demand.
DALLAS—Headquarter relocations, expansions and corporate moves have characterized the Texas market for the last decade. Every metro has experienced one or more major corporate move during that timeframe, according to a list by the HT Group.
Most notably, Apple announced it would nearly double its Austin-area workforce with 5,000 new jobs and potentially 10,000 more over time. The move is expected to make Apple the largest private employer in Austin and will be the company’s biggest corporate location outside of California.
Moreover, Amazon is expanding its Austin Tech Hub with plans to create 800 new tech jobs in the process, which will necessitate a move into a new 145,000-square-foot office in The Domain in 2020. Also, the US Army selected Austin for its new Army Futures Command facility.
Much of San Antonio’s latest business growth is also due to technology. Biotech specifically, is on the rise within the city’s tech and healthcare industries (which are expected to grow 12 to 15% by 2023). Tech incubators and Rackspace are attracting new startups and biotech-friendly programs, while the University of Texas Health Science Center at San Antonio is doing the same for promising new medical device and biomedical companies.
In addition, more than 75 companies have relocated national or international headquarters to Dallas-Fort Worth in the past seven years. The biggest win for DFW in 2019 is Core-Mark, a Fortune 500 company moving to Westlake from San Francisco.
Another big win for North Texas is PGA of America’s recent decision to move from Palm Beach County Florida to Frisco, TX. While the actual move is still a few years away (2022), excitement is mounting about what else the move will bring, such as a hotel, convention center and other facilities in a 600-acre complex (along with two PGA Championships, two KPMG Women’s PGA Championships and perhaps even the Ryder Cup).
McKesson Corp., the nation’s largest pharmaceutical distributor, will relocate its headquarters from San Francisco to Irving this month. The move makes McKesson the second-highest revenue company based in North Texas, surpassing AT&T Inc. but not Exxon Mobil.
As Houston continues to break away from its singular reliance on oil and gas jobs, it is starting to attract its own tech companies. The Greater Houston Partnership forecasts the Houston metro area will create 71,000 new jobs in 2019. Gains are anticipated in all sectors with healthcare, construction and administrative services leading the growth.
With an already saturated job market, Texas employers should keep an eye on these newcomers and devise a strategy surrounding these changes. More jobs attract more top talent to the state–and that relocated talent often brings along families also on the hunt for jobs and the need for supporting services, says the HT Group.
“In addition to a strong workforce, and rising labor and population rates, the business climate in Texas will facilitate further growth as companies nationwide move their operations to the state,” Joe Lubeck, American Landmark CEO tells GlobeSt.com.
In preparation for the influx of new renters brought by these companies, American Landmark recently acquired a six-property multifamily portfolio with assets in all of Texas’ major metro areas. The portfolio includes multifamily assets in Houston, San Antonio, Austin and Irving (northwest of Dallas), totaling 2,284 apartment units at a value of $311 million.
The acquisitions bring American Landmark’s Texas portfolio up to 33 properties. The company currently owns and manages approximately 25,000 apartments throughout the Southeast and Texas, and plans to add another $2 billion in properties to its growing multifamily portfolio this year.
“Texas is a national leader in both employment and population growth, continuously attracting new residents with its low cost of living and major employers who seek a skilled labor force,” said Christine DeFilippis, chief investment officer of American Landmark. “We recognized this at the start of the trend, and we look forward to continue selectively acquiring assets in this growing market.”
American Landmark plans to implement $14.7 million in capital improvements for community and apartment amenities. Improvements include granite countertops, package locker systems, stainless steel appliances, clubhouse enhancements and pet grooming stations.
The properties in the portfolio include:
Hyde Park at Lake Wyndemere (Houston), to be renamed Artisan at Lake Wyndemere, is located at 2109 Sawdust Rd. in the Woodlands neighborhood. Built in 2000, the garden-style community includes 320 units and was 96.8% occupied at the time of purchase.
Hyde Park at Enclave (Houston), to be renamed Hayden at Enclave, is located at 12951 Briar Forest Dr. Built in 1999, the newly renovated community includes 476 units and was 95.1% occupied at the time of closing.
Manor at Castle Hills (San Antonio), to be renamed Alon at Castle Hills, is situated at 1835 Lockhill Selma Rd. Built in 2000, the garden-style complex features 306 units and was 97.7% occupied at the time of purchase.
Hyde Park at Ribelin Ranch (Austin), to be renamed the Asten at Ribelin Ranch, is located at 9900 McNeil Dr. The garden-style community includes 350 units and was 96% occupied at the time of purchase.
Hyde Park at Wells Branch (Austin), to be renamed Beck at Wells Branch, is located at 2801 Wells Branch Pkwy. Built in 1999, the community features 576 units and was 93% occupied at the time of closing.
Lakepointe at Las Colinas (Irving), to be renamed The Blvd, is located at 5353 W Las Colinas Blvd. Built in 2012, the luxury apartment community includes 256 units and was 96.8% occupied at the time of closing.