With big businesses like Toyota and Liberty Mutual booming in the region’s northern suburbs, law firms, accounting agencies and other support companies are trickling south, opening offices inside the city of Dallas.
And they’re bringing with them large millennial workforces looking to live, work and play in the same area.
The population influx is in turn causing a demand for apartments in Dallas proper, says Jorg Mast, senior vice president with real estate services firm JLL. Uptown and Downtown Dallas are particularly hot, as they remain Dallas’ largest office markets.
Downtown and Uptown apartments
See rental rates for Uptown and Downtown at some of the area’s most popular buildings.
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But as those neighborhoods run out of room for new development, other areas are also becoming popular for rental housing. Units constructed in Dallas’ Deep Ellum/Farmers Market area are leased up rapidly as their built, Mast added.
“Downtown is pretty much developed out to a certain extent, and all the buildings have been rehabbed,” he said. “The highest level of development is near the Farmers Market, and those communities enjoy a fast lease up.”
As space fills, construction is also pushing out to the fringes of Dallas core. That means East Dallas and Knox Henderson are becoming hot spots, as well.
Deep Ellum/Farmers Market and Knox Henderson apartments
See rental rates for Deep Ellum, the Farmers Market, and Know Henderson.
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As demand rises in each area, complexes are finding themselves jockeying for the same tenants. Amenities, from on-site dog grooming stations to floor-to-ceiling windows are becoming key.
But those luxuries, when coupled with demand, come at a price.
“Apartment prices increased about 7 percent this last year and for good reason,” said Drew Mancuso, co-owner of Dallas Apartment Locators. Mancuso compiled hot rentals in Dallas’ top neighborhoods for the Dallas Business Journal.
“Dallas is top 3 for job growth in the entire country so that’s bringing tons of young professionals here,” Mancuso added. “You’ve got huge companies like Liberty Mutual, State Farm and Toyota that have moved their headquarters to North Texas. The demand is definitely there, which is obvious when you see most apartment buildings are occupied around 92 percent to 97 percent.”
However, the rapid pace of apartment building in Dallas is likely to taper. As land becomes more expensive and it becomes harder to obtain construction financing, the city’s apartment pipeline, once at 50,000 units, is likely to dwindle.
“That’s a good thing,” Mast added. “We need to get back to rent growth that we enjoyed over the past few years.”
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