Home > multifamily, New Construction, Uncategorized > Multifamily market should continue to thrive in 2014

Multifamily market should continue to thrive in 2014

February 24, 2014 Leave a comment Go to comments

Industry leaders said Tuesday that Houston’s apartment market experienced some of its best times ever over the last two years, with new building, sky-high occupancy rates and pricier rents. They predicted more positive trends for 2014.

There are 21,000 multifamily units under construction, with about 17,000 expected to be completed this year, Bruce McClenny, president of Houston-based Apartment Data Services, said at a Houston Apartment Association panel discussion at the Post Oak Hilton.

 

 

 

About 15,000 units were built last year, he said, twice the number built in 2012.

“The whole market has seen good news and good growth,” McClenny said. “People are  getting excited about going  into Houston. We’ll be in good shape for the next five years.”

Developers cited rising costs for labor, construction and property taxes and strict financing as points of concern.

“We have memories, and we wonder what’s going to happen when the music stops,” Orion CEO Kirk Tate said, calling the last two years the best of his 40-year career. “I don’t want to be holding too much when it stops.”

Still, occupancy rates in 2013 rose to 91.5 percent and rents rose 6.6 percent to  $1,500 a month.

McClenny said the opening of upscale developments also has helped push rents higher. But he added that, compared to other markets in the U.S., Houston remains relatively inexpensive.

Growth in the greater Houston area is focused in the west. Development of multifamily has lagged to the south and east.

Keith Oden, president of Houston-based Camden Property Trust, said its recent City Centre apartment project has seen leases signed faster than any property in Camden’s 30-year history.

“It’s a testament to what’s going on in Houston,” Oden said. “Houston has had the two best years of any market we’ve ever operated in.”

He said he expects more moderate growth in 2014, down from double-digit gains his company experienced the last two years. He said labor costs rose 15 to 17 percent over 2012 and 2013.

Job growth, particularly white collar, has pushed demand for luxury living in Houston.

On Tuesday, Dallas-based ZOM Texas announced that construction began on The Hudson, a new luxury apartment complex in the Galleria-Uptown area. The project will feature 431 apartments on a 5.3-acre site at Fountainview and San Felipe.

Reprint from the Houston chronicle     By Erin Mulvaney

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