Connect Texas Multifamily 2017 Recap
1. Houston pipeline is softening which should lead to higher occupancies and rent growth in 2018.
2. Secondary and tertiary markets are less aggressive on their assessments compared to the major markets which allows real estate taxes to stay lower (70-80% range or better) providing better yields to investors.
3. Construction costs continue to rise with all of the developments in Multifamily but developers agree that rising costs is hedging overdevelopment.
(All dollar amounts below are cost per net rentable square feet)
- a. Surface/Garden: $115-$120
b. E-Urban/Surface Parked: $120-$125
c. 4-Story Wrap Garage: $155-$160
d. 5-Story Wrap Garage: $160-$165
e. 4-Story Over 1 Podium: $155-$160
f. 5-Story Over 1 Podium: $165-$170
g. High-Rise: $250-$275
*Note: Price depends on average square feet, site conditions and other factors. Development prices are 15-30% higher across the U.S.
4. Federal Reserve Bank of Dallas representative expects Texas economy to continue to outpace U.S. economy growth rates.
5. Capital availability is especially strong for green and affordable projects in the $1 million to $20 million range.
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