President & CEO Rick Graf joined other commercial real estate experts at the recent RealShare Conference in Dallas to discuss the players, the processes, and the pitfalls of Dallas’ epic deals and to talk about what is in store for the industry. Moderated by Diane Butler, Executive Chairman of BBG, Rick sat alongside Bill Brown, CIO of Granite Properties; Tony Crème, Senior Vice President of Hillwood; Steve Fried, Partner at Mesa West Capital; and Mark Miller, Principal & President of NAI Robert Lynn. The hour-long session titled “DFW’s Big Deals and Dealmakers from Finance, Sales & Leasing” honed in on how growth in population, jobs and corporate relocations have primed North Texas for some of the biggest deals to date, many of which were recounted during the discussion.
In a conversation about development, equity and financial trends, Rick mentioned there are approximately 22,000 apartment units proposed in the Uptown, City Line and Plano/Frisco/McKinney markets with an additional 20,000 units in the Dallas metro pipeline. He said, however, that there is a major tightening in financing terms for new construction deals coming down the pike. As far as product preference, Rick mentioned that institutional multifamily clients are currently focused on core deals versus value-add properties and that Class A and B assets are doing very well. In addition, most new builds in the market, he said, have mixed-use components.
Rick talked about how there is a direct correlation between job growth and the strength of the multifamily markets. With nearly 120,000 jobs added in North Texas in 2016, the industry remains healthy. Rent growth, however, is slowing at 4.2 percent today versus 7.5 percent in last year. He talked about how absorption rates are solid and still at a peak, although poised to calm, and that multifamily occupancy is trending around 95 percent in the market.
The session wrapped with all panelists providing market predictions of the next few years. There was an overwhelming view that the real estate environment will be positive, although somewhat slower.