Here’s why Dallas-Fort Worth apartments are a hot commodity for investors
The hottest investment property in North Texas for 2020 is rental homes. Investors have bought thousands of homes in Dallas-Fort Worth in the past few months, and the buying spree is showing no sign of diminishing.
Even the pandemic hasn’t disrupted sales of hundreds of millions of dollars worth of homes in North Texas.
“To some extent, even we’re surprised at the number of sales,” said Blake Taylor, senior vice president of Irving-based housing company JPI.
JPI has just sold more than 3,500 D-FW apartments to the investor Lone Star Funds and other buyers.
Taylor said he expected shopping to continue.
“We expected a big increase because so many buyers were looking it was the third quarter and they hadn’t spent any money,” he said. “Apartments did well compared to some other property groups.”
Predictions at the beginning of the pandemic that the housing sector were heading for a sharp downturn have not come true.
While rents have decreased in some markets, there has been no increase in vacancy rates.
Investors who may have previously bought office and retail buildings are now putting apartments on their shopping lists.
“We are absolutely seeing strong demand from home buyers in D-FW,” said Will Balthrope, Executive Director of Institutional Property Advisors. “The residential investment sales market was choppy earlier in the year with the onset of COVID, but we saw a rubber band snap back that started in late summer.
“The sales volume of our team in D-FW has been higher than ever in the last few months.”
Institutional Property Advisors have sold nearly 20 rental properties since the early pandemic ended.
“It’s a V-shaped recovery,” said Balthrope. “Things screeched to a halt in April and May and then roared back in September and October.
“The pool of buyers has increased and institutions are returning on a large scale.”
Los Altos Trinity Green Apartments in Dallas.(Lawrence Jenkins / Special Contributor)
According to Balthrope, the low interest rates have partially offset investor concerns about flat to slightly falling rents.
“There is strong demand from out of state buyers looking to move their capital from the landlord-challenged, rent-restricted apartment markets on the LA, San Francisco and New York coast to our business-friendly market,” he said.
Buyers, who have made some of the largest home purchases in the area recently, come from across the country.
Toronto-based Dream Unlimited Corp. and the Pauls Corp. from Denver recently bought five local rental communities with 1,200 apartments for US $ 178 million. The properties are in Lewisville, Euless and Carrollton.
Earlier this year, Virginia-based Harbor Group International purchased 3,300 homes in Dallas, Plano, Lewisville, the North Richland Hills, Arlington and Fort Worth. The north Texas purchase was part of a nationwide $ 1.85 billion deal.
Houston-based investor Barvin Building Communities has just acquired the 324-unit Alta Trinity Green 2-year-old apartments in West Dallas that have been renamed Los Altos Trinity Green Apartments.
CEO Eric Barvin hopes to acquire more D-FW rental units.
“Yes, we want to expand our portfolio in Dallas,” said Barvin. “It’s a great market and well positioned for a post-COVID world.”
The Jefferson Boardwalk Apartments in Farmers Branch are one of eight D-FW rental companies that JPI has sold to Lone Star Funds.(JPI)