2021 Dallas-Fort Worth Texas MSA - Greystone
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SPRING ISSUE
2021
MARKET INSIGHT REPORT
Dallas-Fort Worth
Texas MSA
| TOTAL EMPLOYMENT | UNEMPLOYMENT
Employment / Unemployment
4.00 14.0%
Millions
The Dallas-Fort Worth-Arlington metro area was an undeniable leader 3.90 12.0%
nationally in 2020 with a significantly lower percentage of job losses posted
3.80
than the nation as a whole, as well as most other metro areas. Overall, a YoY 10.0%
2.1% decline in non-farm employment was recorded in December 2020, as 3.70
8.0%
compared to a 6.0% decline nationally. The region’s leisure and hospitality
3.60
sector accounted for the lion share of this loss, or 64,000 of the 81,600 jobs shed. 6.0%
Indeed, the metro area witnessed strong growth in financial activities (3.4%) 3.50
and professional and business services (3.3%), indicative of Dallas-Fort Worth’s 4.0%
3.40
clout among U.S. major metro areas, especially in its ability to attract top-tier
3.30 2.0%
firms from higher-expense locales and those that are more regulatory, such
as California. A report by Spectrum Location Services published in late 2019 3.20 0.0%
cited 660 California firms moving 765 facilities out of California in a two-year
Apr '20 Sept '20 Dec '20 Dec '19 Apr '20 Sept '20 Dec '20 Dec '19
span. Recent relocations or expansions to the Dallas-Fort Worth metro include
Peleton at Plano’s Legacy Central, Allied Electronics, Bell Textron, Granbury,
Incora, Ariat International with a new regional headquarters and distribution
center in Fort Worth, and Lowe’s, with a new fulfillment center in Denton opening
in 2021. With firms relocating to other Texas locations as well, such as Oracle to
Austin and Hewlett Packard Enterprise to Houston, Texas Governor Greg Abbott METRO AREA EMPLOYMENT DECEMBER PERCENT CHANGE FROM
says companies moving headquarters to Texas has turned into a “tidal wave”. (THOUSANDS) 2020 DECEMBER 2019
Total Nonfarm 3,794.0 -2.1%
The current Moody’s Analytics forecast for Dallas-Fort Worth
Mining, Logging, and Construction 230.6 -1.7%
shows a total job increase of 3.9% in 2021 and an increase of 3.2%
Manufacturing 281.2 -3.2%
in 2022. The total level of jobs is not expected to surpass the peak
Trade, Transportation, and Utilities 839.8 0.9%
of 2019 until 2022. Both rent growth and declining apartment
Information 80.6 -3.2%
vacancy are also predicted to begin trending again in 2022.
Financial Activities 335.2 3.4%
Professional and Business Services 672.6 3.3%
Education and Health Services 442.8 -6.8%
Leisure and Hospitality 337.9 -15.9%
Other Services 124.6 -2.3%
Government 448.7 -1.3%
Sources: U.S. BLS, Current Employment Statistics
2 Dallas-Fort Worth Metro Market Insight Report 3
Dallas Rental Market
• First decline in rental rates in decades | AVERAGE RENT / VACANCY
$1,300 9.0%
• A 1.0% decline is predicted for 2021 before rent growth
resumes by 2.1% in 2022 and 2.9% in 2023 $1,200
7.0%
• Vacancy rate projected to jump 170 basis points in 2021,
$1,100
though older product built prior to 2000 should see vacancy
5.0%
remain under the 5.0% equilibrium threshold $1,000
$900 3.0%
'16 '17 '18 '19 '20 '21* '22*
Average Rent Average Vacancy
Source: Reis, *Projected
-1.8%
Average Rent Decrease
| ASKING RENT COMPARISON
From $1,257 to $1,234
$2,000
YoY
$1,000
YEAR ASKING VACANCY
BUILT RENT RATE $0
Studio 1 BR 2 BR 3 BR
Before 1970 $983 4.3%
| ASKING RENT PSF
1970-1979 $985 4.8%
$3.00
1980-1989 $1,023 4.1%
1990-1999 $1,316 4.7% $2.00
2000-2009 $1,428 5.2% $1.00
2010-2019 $1,676 9.9%
$0.00
After 2019* $2,068 34.8%
Studio 1 BR 2 BR 3 BR
*Includes Properties in Lease-Up
Dallas-Plano-Irving MSA Southwest U.S.
Source: Reis, 4Q 2020
4 Dallas-Fort Worth Metro Market Insight Report 5
Fort Worth Rental Market
• One of the few markets nationally to avoid a loss in asking rent in 2020 | AVERAGE RENT / VACANCY
• A 0.8% decline in average rent is expected in 2021, followed $1,100 8.0%
by a 2.0% gain in 2022 and a 2.8% gain in 2023
$1,000
6.0%
• Average vacancy will crest at 6.1% in 2021, then
$900
decline to 5.8% in 2022 and to 5.6% in 2023
4.0%
$800
$700 2.0%
'16 '17 '18 '19 '20 '21* '22*
Average Rent Average Vacancy
Source: Reis, *Projected
0.0%
Average Rent Unchanged
| ASKING RENT COMPARISON
Remains at $1,031
$2,000
YoY
$1,000
YEAR ASKING VACANCY
$0
BUILT RENT RATE
Studio 1 BR 2 BR 3 BR
Before 1970 $944 4.7%
| ASKING RENT PSF
1970-1979 $974 3.6%
1980-1989 $989 4.0% $3.00
1990-1999 $1,272 4.5% $2.00
2000-2009 $1,317 3.7% $1.00
2010-2019 $1,549 8.0%
$0.00
After 2019* $1,803 21.7%
Studio 1 BR 2 BR 3 BR
*Includes Properties in Lease-Up
Fort Worth-Arlington MSA Southwest U.S.
Source: Reis, 4Q 2020
6 Dallas-Fort Worth Metro Market Insight Report 7Multifamily Construction Permits
The Dallas-Fort Worth apartment market will see completions ratchet up in • Active single family for-sale inventory down 47% in
2021, but the total will remain below recent historical annual totals, including by December 2020 as compared to one year prior.
as much as 28% in 2019. While the Dallas side of the Metroplex will see a more
• Months of for-sale inventory was 1.1, contracting nearly 52% YoY.
constrained development pipeline, the Fort Worth area will see a stronger year
than most years past with 4,064 units to be delivered. Part of the shift can be • Home sellers received 98% of list price at close.
attributed to a trend toward renting in less-congested suburban locations, as
well as to more affordable rents away from urban cores in light of the growing
acceptance of work-from-home practices embraced by corporations. | TOTAL RESIDENTIAL BUILDING PERMITS
70,000
60,000
50,000
17,659 New Units
40,000
30,000
2021 Expected Completions
20,000
11,748 New Units Will Follow in 2022
10,000
0
| COMPLETIONS / NET ABSORPTION '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
30,000 Multifamily Units (5+ Units) Single Family Units (1-4 Units)
25,000 Source: U.S. Census, Multifamily Includes Condos
20,000
15,000
10,000
5,000
44,929 15,133 $301.9K
0
'16 '17 '18 '19 '20 '21* '22*
Completions Net Absorption Single Family Multifamily Permits Median Single
Source: Reis, All Figures are Annual Totals, *Projected Permits (5+ Units) Family Price
+26.1% YoY -44.1% YoY +8.3% YoY
8 Dallas-Fort Worth Metro Market Insight Report 9Multifamily Sales
| AVERAGE SALES PPU / CAP RATE
$200,000 7.0%
$150,000 6.5%
$10.2B 73,011
Sales Volume Total # Units Sold
$100,000 6.0%
-8.0% YoY -14.8% YoY
$50,000 5.5%
$0 5.0%
'11 '12 '13 '14 '15 '16 '17 '18 '19 '20
$ / Unit Cap Rate | APARTMENT SALES TRANSACTIONS
Source: Real Capital Analytics, Based on Sales of $2.5 Million and Greater
Billions
120,000 $12
100,000 $10
$154,034
80,000 $8
60,000 $6
Avg. Sold Price / Unit
+10.8 YoY 40,000 $4
20,000 $2
0 $0
5.1% Total # Units
'11 '12 '13
$ Volume
'14 '15 '16 '17 '18 '19 '20
Avg. Cap Rate Source: Real Capital Analytics, Based on Sales of $2.5 Million and Greater
-30 bps YoY
Sources: Greystone; Reis; RealCapitalAnalytics; CoStar; U.S. Census; Bureau of Labor;
Fort Worth Chamber of Commerce; Dallas Chamber of Commerce; Texas A&M
10 Dallas-Fort Worth Metro Market Insight Report 11Copyright ©2021 Greystone & Co. II LLC. All Rights Reserved. References to the term “Greystone,” refer to Greystone & Co. II LLC and/or its affiliated companies, as applicable. Although the information contained herein has been obtained from sources deemed reliable, Greystone Real Estate Advisors LLC makes no express or implied guaranty, warranty, or representation that the information is complete or accurate. Further, any projections, opinions, assumptions, or estimates used or offered herein are for the purpose of example only. Accordingly, Greystone Real Estate Advisors LLC recommends that you conduct your own careful, independent investigation into all aspects of this research report in order to gain a full understanding of the program / topic and reach your own conclusions or opinions as to its value and any related issues. The information contained in this research report should be independently examined by experts selected by you. Any recipient of these materials from Greystone Real Estate Advisors LLC should not and may not rely on these materials for any purpose beyond general introductory information.
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