CBRE Report: DFW Leads the U.S. in Multifamily Real Estate Investments

A new report from Dallas-based CRE services and investment firm CBRE shows that DFW was No. 1 in the U.S. in multifamily investments over the last four quarters. Nationwide, Q1 2022 saw the strongest multifamily absorption since 2000. And Texas is leading the U.S. in multifamily completions, as rent growth continues to gain momentum.

“The rise in demand has been fueled by household formation, job and wage growth, and sharply rising home prices,” the report said.

“Texas markets were among the most active” for multifamily real estate heading into 2022—and the Dallas-Fort Worth region was a big reason why.

That’s according to a new report from Dallas-based commercial real estate services and investment firm CBRE, which looked at key metrics in major markets across the U.S.

One robust finding: Nationwide, multifamily absorption in the first quarter of 2022 was the highest it’s been since Q1 of 2000.

“The rise in demand has been fueled by household formation, job and wage growth, and sharply rising home prices,” CBRE wrote in the report.

DFW No. 1 in the U.S. in multifamily investments

Over the past four quarters, DFW was No. 1 in the nation in multifamily investments, the report said. The region saw $29.2 billion in total volume, accounting for 7.8% of the U.S. total. The next-closest market for investments was Atlanta, which saw $21.4 billion over the past four quarters.

The DFW region saw net absorption at 4,600 during the first quarter and 35,200 across the past four quarters, making it the No. 3 market in the U.S. in that metric, behind Houston and ahead of Austin.

Texas led nation in multifamily completions

The report also notes that Texas markets saw more muti-family completions than other states. Houston led in Q1, taking the No. 2 spot overall, behind only New York, with 4,900 completions. Dallas came in just behind Austin for Q1 completions, with 3,600.

The news comes as rents are increasing across the country—except in San Francisco and San Jose—and vacancy rates are falling. Overall, CBRE said that year-over-year vacancy rates fell to a record-low of 2.3% in Q1. It also notes that this is the first time that vacancy rates across all multi-family asset classes were below 3%.

That comes as the Dallas region saw an 18.5% year-over-year increase in rent, the second highest in the South Central region, behind only Austin, which saw an increase of 23.9%. The region with the highest year-over-year change was the Southeast, with West Palm Beach ranking No. 1 with a rent increase of 30.4%.

“A strong rebound in investment volume for large coastal markets is expected this year as rent growth gains momentum,” the report states. “These markets are expected to lead U.S. rent growth in the second half of the year.”