August 29, 2019
By Amy Wolff Sorter
With megalopolis sprouting throughout Texas, it made sense that the recent Connect Texas Multifamily conference should discuss trends occurring in urban and suburban areas throughout the state. In a session entitled, appropriately enough “Suburban vs. Urban: Spotlight on Development Trends,” panelists did just that.
The session, moderated by Michael Ware of Berkadia, began with a high-level view of Texas apartment markets. Noted RealPage Inc.’s Carl Whitaker: “DFW is the development leader in nation. To counter that, this is also where a lot of the demand is.” He went on to say that Fort Worth is outpacing Dallas in terms of rent growth, with RealPage positioning it as a top three performer in the next two-to-three years. Austin, in the meantime, “is among the top five performers in the U.S.,” he said, with Houston being more of a mixed bag, with demand turning positive. “Lastly, there is San Antonio; it’s been the slow and steady market,” Whitaker explained. “It won’t hit you a home run, but it won’t strike you out, either.”
What is fueling that demand? More people are coming to Texas. When it comes to North Texas, for example, “We added 118,000 jobs in 2018, second only to New York City,” said Larry Hamilton with Hamilton Properties Corp. Furthermore, “with all the people moving here, they’re moving from somewhere else,” observed Catalyst Urban Development’s Paris Rutherford. “they’re bringing their cultural experiences.” He went on to say that people’s level of expectation is higher than it was years ago. As such, any multifamily project should focus on the end user and cater to their desires, especially when it comes to suburban developments.
This led to a discussion about place-making. But place-making goes beyond simply slapping a mixed-use development into a municipality or, as Rutherford put it: “taking densities, plopping them down, and not thinking it through.” Sean Terry of Centurion Development Group and Jim Lake Companies’ Amanda Moreno-Lake were adamant that municipalities need to be involved from the get-go, especially when it comes to private-public partnerships.
“When it comes to re-developing older structures, a great relationship is important with that municipality,” Moreno-Lake said, pointing out that her company did just this when working with Waxahachie, Ennis and Cedar Hill. “You need a good working relationship with the city staff, and to have an open mind.” Furthermore, Terry continued, getting the community involved is hugely important; something that Centurion Development did when announcing plans to re-develop the iconic Collin Creek Mall. “We invited everyone’s participation with that; Collin Creek was important to a lot of the community for many years,” he explained. “We reached out to the community, and engaged them.”
Then, there is the walkability component. The panelists agreed that multifamily and mixed-use developments that are pedestrian-friendly, with plenty of green space and nature, is catering to the demand of consumers and residents. RealPage’s Whittaker introduced hard data into the discussion, pointing out that, “if you look at RealCapital Analytics, the current valuation of highly-walkable urban apartment products is twice as high than at its previous peak. Suburban walkability has the second largest valuation.”
Near the end of the session, Berkadia’s Ware asked about opportunities and challenges when it comes to suburban and urban multifamily issues. Rutherford, who had compared DFW to Los Angeles during the session’s opening remarks, brought up the comparison once again. Right now, there are suburbs in DFW. However, when it comes to the Los Angeles basin, “there are no suburbs there,” he explained, adding that employment is being taken out to the suburbs, followed by interesting experience and place-making. “Los Angeles is one large collection of urban cities,” he said, “and that’s where we are headed here.”
Pictured (L-R): Michael Ware (Berkadia); Amanda Moreno-Lake (Jim Lake Companies); Larry Hamilton (Hamilton Properties Corp.); Carl Whitaker (RealPage Inc.); Sean Terry (Centurion American Development Group); Paris Rutherford (Catalyst Urban Development)
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Tags: Apartments & Multifamily