5 Key Insights from the 2023 Bisnow Multifamily Annual Conference (DFW)

Our Vice President and Dallas lead, Joshua Pittman, and Associate and Project Manager, Jon Holden, recently attended the 2023 Bisnow Multifamily Conference in Dallas-Fort Worth. The conference was a great opportunity to hear industry leaders discuss the current state and future outlook of the thriving, ever-evolving DFW multifamily market. Bringing together a diverse group of real estate professionals, it was an excellent forum for sharing ideas and insights, five of which, we’ve rounded up below.

STATE OF THE MULTIFAMILY MARKET

The misconception that DFW is at risk of a multifamily oversupply is not supported by facts. The region’s population continues to grow rapidly, with over a million people moving to DFW in recent years, driving demand for multifamily housing. The urban core of Dallas is particularly attractive, and while the next three to five years may see a slight flattening of the market, the overall five-year forecast remains robust.

The DFW multifamily market is being shaped by a number of factors, including interest rates and political events. The need for higher returns has led to a shift toward luxury properties, with investors seeking a minimum of 6-6.5% return on their investments. These factors have had a significant impact on the DFW multifamily landscape, and it will be interesting to see how they play out in the coming years.

AFFORDABILITY CHALLENGES 

The need for affordable housing in DFW is pressing, but the constraints of city approval and funding make it difficult to meet this need. Construction costs are high compared to other parts of the U.S., so many developers are choosing to focus on luxury housing options. However, cities like Frisco are setting an example for the rest of the region, emphasizing the importance of high-quality design to appeal to the growing luxury market.

AMENITIES: HOSPITALITY EXPERIENTIAL DESIGN

As the DFW multifamily sector evolves, amenities are becoming more and more important. In response to residents’ growing interest in sustainable living, amenities like EV charging stations are becoming a key selling point. In addition, apartment developers are creating more amenity-rich environments that mimic the hospitality and resort experience, with spaces like resort-style pools, state-of-the-art fitness centers, and welcoming communal spaces.

CAPITAL INVESTMENTS 

With current low-interest rates, many developers are finding it challenging to make deals that offer a sufficient return. This has pushed many to focus on luxury projects, which have higher profit margins. The market’s health will likely be more evident in 2024, as existing low-cap rates begin to expire.

ADAPTIVE RE-USE: OFFICE TO RESIDENTIAL

Developers are taking advantage of the opportunity to convert existing, aging 80s office buildings in the Dallas Central Business District (CBD) into residential units. The Comerica Tower and Energy Plaza are just two examples of the many exciting projects that are currently underway. This trend of urban revitalization extends to vertical mixed-use developments that combine residential, hotel, and office space in a single location.

Overall, despite certain challenges, the Dallas-Forth Worth region’s poised to emerge as a thriving and dynamic market.