DFW Has Drawn Nearly $2B More Multifamily Investment Than Any Other U.S. Metro

Dallas-Fort Worth leads the nation in attracting multifamily investment so far this year, and it isn’t even close.

DFW took the top spot among all U.S. metros in terms of multifamily investment for the first half of 2021, with $7.7B in total sales — nearly $2B ahead of its closest competitor, according to CBRE’s Q2 2021 U.S. Multifamily report released Monday. Second-place Atlanta chalked up $6B in first-half sales and Phoenix was not far behind with $5.7B in investment.

DFW’s performance was so strong in the first half of the year, investment in the area represented 8.4% of all multifamily investment nationwide. Its showing marked a 74.8% increase over H1 2020 and a 50.4% jump over H1 2019.

CBRE Executive Vice President Danny Baker, who leads the company's DFW multifamily capital markets team, told Bisnow the sector had experienced elevated levels of capital inflows due to apartments' ability to generate consistent cash flow during a period of extreme economic volatility.

"New investors to multifamily, as well as investors that have historically been market participants, have focused their capital deployment strategy on high-growth markets with compelling demand-side fundamentals," Baker said. "North Texas is a prime target for investors for many reasons, including its accelerating rental, job and population growth that is forecasted to continue and property fundamentals that suggest our market is rapidly recovering and moving into the expansion phase of the cycle." 

That level of interest is also evident in the construction pipeline: About 4,000 new multifamily units were completed in Q2 — the third-most nationally for the quarter — and 14,200 units have come online over the past four quarters, CBRE reported.

Though Dallas might be leading the pack, multifamily investment is up across the country. National Q2 investment volume exceeded expectations and increased 34% over the quarter to reach $52.7B, according to CBRE. Absorption was at near-record level, hitting 179,400 units, the highest Q2 total since the mid-1990s.

Multifamily has been one of the hottest targets for investors during the coronavirus pandemic, with deal volume up 8% over 2019 averages, according to a July Real Capital Analytics report.

“Continued broad economic recovery, employment growth, rising consumer confidence and more workers returning to the office will keep demand high through Q3,” CBRE predicted, adding some of the market segments most impacted by pandemic restrictions such as Class-A assets and urban core submarkets had notable performance gains and were set to gain more ground in upcoming quarters.