DFW’s new urban core apartments — seeing mixed lease-up and taking longer to stabilize at a wide range of rents

Graph of Dallas-Fort Worth urban core class A multifamily effective rent and occupancy
  • Dallas’ existing class A urban core apartments (29,500 units) have been performing well. Since 2020, occupancy has been steady at above 92% and effective rents now average $2,300+ per month or around $2.45 psf — a 20% increase over the period.  
  • Since 2020, more than 5,500 apartment units have been delivered. Lease-up performance of these units has been mixed. Rents average over $3,100 per month ($3.20 psf) – a 35% premium over the existing class A stock.  What is even more significant is that this average masks that effective rents in the newest units can range from $2,000–$2,500 to over $4,000–$5,000 per month ($3.30–$4.00+ psf).  
  • The significant deliveries combined with high rents have blunted lease-up in many projects. Even though occupancy is 85%, monthly lease-up has averaged only 15–16 units (including projects not yet stabilized). In comparison, that pace was 23–25 units a handful of years ago.  
  • This slower pace translates into longer stabilization periods. In fact, 8 of the 18 newest projects are still in initial lease-up. While a few have recently delivered, some (and even a few now stabilized assets) saw lease-up of sub-12 units per month. This translated into more than 2 years for some to stabilize. Generally, apartments should stabilize (90% occupancy) within a year or so to avoid competing with their own resident turnover and to minimize the impact of residents leaving to chase introductory pricing and free rent at newer offerings.

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