Summary
- Multifamily rent growth expanding as pent-up household formations are released
- Easing inflation sets stage for Federal Reserve to gradually reduce interest rates
- Middleburg Communities to capitalize on higher rental gains relative to peers
- American Landmark Apartments expands presence in Austin market
- Wolf Ranch enters final phase of development
- Urbanspace finishes 56-story condo tower, The Modern Austin Residences
- $1 billion private development plan for new Missions stadium
- Kendall County plans for continued growth
- Significant growth and investment in New Braunfels
National
After Stagnating for Two Years, Multifamily Rent Growth Finally Expands (CoStar)
- Why it matters: Release of pent-up household formations sets the stage for multifamily rent expansion.
- Since the end of July, national rent growth has picked up, rising by 20 basis points to 1.3%.
- The national apartment vacancy rate has stabilized at 7.8%.
- An improving economy, characterized by lower inflation, a strong job market, and increased consumer confidence, has driven multifamily demand to levels not seen since 2021.
- By year-end, national asking rents are projected to rise by 1.6%.
- The Sunbelt region continues to face challenges due to an oversupply of apartments.
Inflation Extends Cooling Streak to Hit 2.5% in August (WSJ)
- Why it matters: The easing inflation in August to a three-year low is setting the stage for the Fed to begin gradually reducing interest rates.
- The consumer price index increased by 2.5% compared to a year ago, marking a decrease from the previous month and extending a five-month trend of easing inflation.
- Traders are increasingly anticipating a 0.25-point rate cut, with expectations of additional reductions throughout the year.
- Slowing food costs, lower prices for used vehicles, and falling energy prices are contributing to the easing of inflation. It is also expected that housing prices will gradually slow down.
Some Property Pros See Build-to-Rent Housing Slowdown, This Developer Sees Opportunity (CoStar)
- Why it matters: Middleburg Communities begins its eighth project as openings forecast to tumble by 2024.
- Real estate professionals anticipate a slowdown in the construction pipeline, despite an overall shortage in supply.
- Completions could drop by 73% in 2025 to as few as 9,500 units, as the industry grapples with limited lending and capital constraints impacting multifamily development.
- Projects that secure funding and start within the next 12 months will be well-positioned in the competitive landscape.
- A key factor in Middleburg’s strategy is the gap between traditional multifamily developments and built-to-rent projects, which has led to higher rental gains compared to multifamily peers.
- Middleburg’s portfolio has achieved a 15% to 20% premium over rents for similarly sized conventional multifamily units.
Austin
American Landmark Apartments Buys Austin, Texas, Area Multifamily Property (CoStar)
- Why it matters: American Landmark owns and operates a growing portfolio of multifamily properties and has expanded its presence in the Austin market.
- Wood Partners divested a 300-unit apartment community in the expanding Austin-Round Rock region.
- EightyOne 10 Blue Goose will become American Landmark’s 47th multifamily property in Texas, marking its second in the Austin area.
- American Landmark targets communities in rapidly growing markets throughout the Sunbelt states.
Fast-Growing Wolf Ranch in Georgetown Enters Final Phase of Development (ABJ)
- Why it matters: Wolf Ranch is one of the region’s most expansive and fastest-growing neighborhoods and is nearing the finish line after nearly 10 years in development.
- The final phase spans 325 acres and will include 671 home sites, increasing the total number of homes in the 1,120-acre community to nearly 2,500.
- Wolf Ranch has gained popularity due to its amenities, including its proximity to a local elementary school, which has fueled its growth.
- Several homebuilders, such as Coventry Homes, David Weekley Homes, Drees Custom Homes, Highland Homes, Pulte Homes, and Tri Pointe Homes, will participate in the third phase.
First look: Downtown's Modern Austin Residences (ABJ)
- Why it matters: The Modern Austin Residences, a 56-story condo tower, brings new inventory and residential options to downtown Austin.
- Designed by Urbanspace, the tower is almost entirely sold, with 98% of market-rate condos acquired.
- The 319 condos range from 600 to 6,000 square feet, priced between $600,000 and over $10 million.
- The development includes 20 affordable condos, enhancing the city's affordable housing offerings.
San Antonio
More Than 1,500 Apartments Could be Built Around Proposed Missions Ballpark Downtown (SABJ)
- Why it matters: A $1 billion private development plan around a new stadium for the Missions in San Antonio will increase downtown housing supply.
- Developer Weston Urban plans to finance the stadium mainly through tax revenue from the new development, aiming for completion by 2031.
- The plan involves building apartments, a hotel, parking facilities, and spaces for restaurants and retail stores.
- The development will attract several thousand additional residents downtown, significantly benefiting existing businesses and local food and beverage venues.
Kendall County's Explosive Growth (SABJ)
- Why it matters: The Kendall County Economic Summit discussed two important topics- transportation infrastructure and water resources as related to the community's development and future.
- Over the next decade, TxDOT plans to invest $148 billion in transportation projects, improving roads and transportation options.
- Collaboration among local governments will ensure infrastructure projects cater to the growing needs of Kendall County's population.
- The summit highlighted the importance of securing water and discovering new sources to meet the region's rising demand.
New $600M Community in Comal County to Deliver 800 New Homes (SABJ)
- Why it matters: The development indicates significant growth and investment in the New Braunfels area.
- The Villalon community will cover 385 acres and include an amenity center. It's part of a series of master-planned communities in New Braunfels, including Veramendi and Mayfair.
- Villalon's development is planned over eight years, with an average of 90 homes delivered annually until 2033. The community will feature 60-foot and 100-foot home lots with diverse assessed values.
- The project's success is driven by strong housing demand in Comal County, attracting homebuilder interest and highlighting the need for quality housing in the area.
