Q2 2012 Dallas, Texas Apartment Submarket Trends

CRE Resources

View our Dallas, Texas Submarket Map

Q2 2012 Dallas, Texas Apartment Submarket Trends

Central Area (Central Dallas and Oaklawn)

  • Reis designates two principal central area submarkets, Central Dallas and Oaklawn. Downtown Dallas and the Uptown area are included in the Central Dallas submarket.

Central Dallas

  • With its redevelopment and Transit Oriented Development (TOD) projects, Central Dallas has emerged as one of the focal points of new apartment development.
  • Demographic factors, including preference on the part of young professionals for downtown amenity-rich rental living, have played a role in the rising activity.
  • Second quarter Central Dallas vacancy was 6.0%, down 60 basis points from a quarter earlier, down 190 year-over-year. The rate was 14.2% as recently as third quarter 2009.
  • Net absorption of 1,147 market-rate units in 2010 was followed by 482 in 2011. First half 2012 followed with 153. Modest positive activity is expected to continue this year.
  • A total of 78 units completed construction during the year’s first half following 292 all told last year in Gables Park 17 at Akard and Cedar Springs Road, part of the two-tower 17Seventeen McKinney mixed-use office-residential development. Granite Properties and Gables Residential Trust developed, respectively, the office and apartment components.
  • Last year’s strong rent growth will be followed by even larger gains in 2012. At $1,806 and $1,671 per month, highest metro wide, second quarter asking and effective averages were up 1.6% and 2.0% for the period.
  • Construction has increased. With varying (and some unspecified) completion dates, Reis reports 1,377 market-rate units underway per report date in six projects in Central Dallas.
  • In 2012, the sole construction completion will be the 78-unit property at 400 N. Ervay (at Bryan Street) downtown, which delivered in January. The project is a redevelopment by Shawn Todd of an old post office and court house building.
  • A total of 907 units in four projects are assigned 2013 completion dates as deliveries accelerate.
  • The largest is Gables Residential’s 334-unit Gables at Fairmount at 2525 Carlisle (at Fairmount) scheduled for delivery next June. Construction began in September 2011.
  • The 321-unit Lemmon Apartments at 2828 Lemmon Avenue (at Oak Grove) is scheduled to complete in January.
  • 3003 Carlisle, with six stories and 192 luxury units, broke ground in May 2012 and will finish in December 2013. Alamo Manhattan LLC is the developer. Equity financing is being provided through Principal Real Estate Investors (PREI), according to TREC; the construction loan has been provided by Texas Capital Bank.
  • More. The same developer is planning The Victory, a five-story 263-unit project on Harry Hines Boulevard at Payne Street, just east of American Airlines Center in the Uptown area, as reported by TREC and The Dallas Morning News. Reis anticipates a March 2014 completion.
  • Due on line in August 2014, following its April 2012 start, is The Taylor, a 308-unit project at 3030 Carlisle, a block away from Katy Trail. StreetLights Residential is the developer.
  • The $135 million mixed-use redevelopment of the 1.3-million-square-foot, 52-story, 1964-built 1401 Elm Street building is expected to deliver 528 market-rate apartments on 39 floors in January 2014. Construction of the apartments had not started per report date. Turkey-based Polidev International LLC is the developer.
  • Update. Camden Property Trust has acquired a “big block” in the Victory Park project adjacent to American Airlines Center, Bloomberg Businessweek reported at the end of May. Construction should begin in 2014 on a 400-or-so-unit apartment project. The 6-acre site has been used as a parking lot.
  • Construction began in October 2011 on the 203-unit (including 162 market-rate units) redevelopment of the Mercantile Continental Building at 1810 Commerce Street. A completion date is not specified.
  • Another redevelopment. A development team composed of Wynne/Jackson, Hughes Development LP and High Street Residential has proposed the $70 million, 510-unit remake of the old Dallas High School (a.k.a. Crozier Tech), as reported by the Dallas Business Journal.
  • Outlook. Reis expects moderate net absorption—260 units—all told for 2012 as the vacancy rate slips to 5.2%. Strong gains, 5.6% and 8.4%, are projected for the asking and effective average rents for the year.
  • Beginning in 2013, new construction deliveries, with emphasis on Uptown redevelopment projects, should be a major theme here. An increase in the vacancy rate to above 6.0% is anticipated as demand slightly trails. Rent growth, while remaining strong, could slow somewhat.

Other close-in: East Dallas

  • Redevelopment also has become a significant trend in the lower-priced East Dallas submarket (the east side of Central Expressway), an effect in part of the new DART rail line.
  • The growing popularity of the submarket has contributed to rising demand.
  • With 106 units delivering in a single project during the first half of 2012 (see below), net absorption ran at 123 units.
  • Vacancy has declined decisively. The rate closed the latest quarter at 5.3%, same as the quarter before, down 320 basis points year-over-year and well below the 13.5% peak reported for first quarter 2009.
  • Rent growth is strong. At $918 and $839, asking and effective averages for second quarter were up 0.9% and 1.2% for the period and were up 5.5% and 6.6% year-over-year.
  • The lack of deliveries in 2011 was only a brief pause in an otherwise active building cycle.
  • Wood Partners’ 106-unit Alta Henderson at Henderson and Belmont avenues completed in February 2012. Construction began in January 2011.
  • Following in July was the 417-unit Blvd. at 5600 SMU Boulevard.
  • Reis reports 1,163 units underway in three projects per report date, one of which will deliver by the end of the year while two complete in 2013, as follows:
  • The Icon at Ross, with 372 units, will finish this October. Construction commenced in December 2010.
  • The next delivery will be the 435-unit Lakewood Flats Apartments at E. Grand Avenue and La Vista Drive, due on line in March 2013. Construction began in August 2011.
  • The 356-unit Cityville at Cityplace Apartments at Capitol and Haskell avenues is scheduled for completion in June 2013. Inland American Communities Group is the developer.
  • Update. Forest City Residential closed its land deal in August 2012 for roughly three Uptown acres at Cityplace (at McKinney and Blackburn) toward development of a $100 million high-rise residential project, the Journal reported at the time.
  • More. “Plans call for 380 apartments and 37,000 square feet of retail space” in a


  • complex including a 21-story structure.
  • Outlook. A rough balance of demand with the new supply is expected for 2012 all told, as the vacancy rate slips to 5.0%. Strong rent growth—gains of 6.3% and 7.1%—are projected for the asking and effective averages for the year. The area has become an increasingly popular zone for redevelopment.

Other close-in: Oaklawn

  • Construction in the small, high-rent Oaklawn submarket, adjacent to and north of Uptown, has been limited. No market-rate units completed construction in 2011 preceded by only 80 in 2010. No units delivered in first half 2012.
  • In 2011 total net absorption was 111 units. The first half 2012 total was negative 212.
  • At 5.1%, vacancy ended the second quarter up 60 basis points from the quarter before, but down 120 year-over-year—and down 930 from the second quarter 2010 14.4% peak.
  • At $1,299 and $1,240 per month in the second quarter, second only to Central Dallas, average asking and effective rents were up 1.1% and 1.5% for the period and were up 3.3% and 4.1% since year-end.
  • Two projects were under construction per report date: the 220-unit Ilume Too, which started in September at Cedar Springs Road and Douglas Avenue, is scheduled to complete in April 2013. The Crosland Group is the developer.
  • The 400-unit Residences was underway without a specified completion date at N. Central Expressway and Carroll Avenue.

Other close-in: North White Rock

  • The DART station at 6060 North Central Expressway has been a catalyst for recent development in this previously overlooked area. Development of and planning for a number of projects on or nearby Skillman Street have emerged.
  • Total 2011 and first half 2012 market-rate net absorption totals were 838 and 472 units.
  • The delivery of 576 market-rate apartments in 2010 was followed by 281 in 2011; the latter belong to JLB Partners’ The Standard at 5920 E. University Boulevard.
  • No projects completed during the first half of 2012. None was underway per report date.
  • Vacancy closed the latest quarter at 7.2%, down 40 basis points for the period, down 190 year-over-year.
  • At $709 and $650, asking and effective averages for the second quarter of 2012 were up 1.4% and 1.7% from the quarter before and were up 2.5% and 3.2% year-over-year.
  • More than 1,330 “dilapidated” apartments were demolished to make room for Prescott Realty Group’s mixed-use Lake Highland Town Center TOD at Skillman and Kingsley Road, it was reported earlier.
  • More. Plans for 1,700 “residences” have been cited. The first phase, at 7200 Skillman, will consist of 200 market-rate apartments, Reis reports.

Other projects in the planning pipeline include the 350-unit Bluffs in the


  • from Lincoln Properties. The project is located within the 7,000-plus-unit Village apartment project on Southwestern Boulevard.
  • JLB Partners is planning “its largest complex yet”—a 1,400-unit community to replace aging inventory along Skillman Avenue and Amesbury Drive, TREC reported in August 2012. “The three- to six-story buildings will… link to the new Ridgewood Trail, a four-mile path to be completed next year. It will be near the DART orange and red lines.”
  • “Because of its proximity to DART’s light-rail line and location between Presbyterian and Medical City hospitals,” the 80-acre Midtown Park property on Meadow Road east of North Central Expressway “is considered a prime candidate for new apartment and medical building construction,” The Dallas Morning News reported late last year.
  • More. Kroenke Group acquired the site in December. Midtown Park is entitled for nearly 4,000 apartments along with other substantial elements.
  • Outlook. Reis expects absorption at nearly 700 units in 2012. Vacancy could close the year at 6.7%. Gains of 3.5% and 5.8% are forecast for the asking and effective average rents for the year. The submarket’s development potential bears watching.

North Suburban: Plano/Allen/McKinney, other

  • Strong business development has made the Plano/Allen/McKinney submarket in Collin County a prime zone for apartment and other forms of development. Part of Frisco also is included in this submarket. Richardson, a separate but neighboring submarket, was caught up in the same trends.
  • Development has been robust but highly cyclical; the area has been prone to bouts of oversupply.
  • The 10-year span ending with 2010 saw 15,684 market-rate apartments complete construction, 6,353 of which delivered during the final two years of the period.
  • The year 2011, however, followed with only 210, all in phase IV of the Parkside at Legacy complex in Plano, which completed that May.
  • With demand reviving, total 2011 net absorption was 1,492 units on the heels of 3,724 in 2010.
  • First half 2012 followed with no new deliveries and just 158 units of positive net absorption as demand backed off. More projects, meanwhile, are on the way.
  • Demand drove the vacancy rate sharply downward in 2010, 2011 and 2012 to date.
  • The rate ended the latest quarter at 4.9%, down 10 basis points from a quarter before, down 140 year-over-year—and the lowest rate on Reis’ current books for this submarket (which reach back to 1995).
  • Second quarter average asking and effective rents were $1,020 and $911, up 0.4% and 0.6% for the period, up 3.1% and 4.0% year-over-year.
  • Construction is heating up. Reis reports 2,288 market-rate units under construction in eight projects per the date of this report.
  • The 312-unit phase V of Parkside Legacy completed construction in Plano in May. Construction began in April 2011.
  • A December finish is scheduled for AMLI Residential’s 315-unit AMLI at the Ball Park at John Q. Hammons and IKEA drives, Frisco. Construction began in October.
  • Underway for completion in 2013 is the 366-unit Discovery at Rowlett Creek in McKinney. The project is scheduled for an April finish. Construction began in May.
  • Also due on line next April is the 220-unit third phase of the Residences at Frisco Square complex in Frisco. Ground was broken in February 2012.
  • The 252-unit Ablon at Frisco Bridges will follow in June 2013 at Gaylord and Warren parkways in Frisco. Construction commenced in November.
  • Outlook. Demand should maintain its lead over new supply this year as the vacancy rate slips to 4.6% and mean asking and effective rents see respective gains of 4.5% and 6.5%.
  • With construction increasing, supply could pull slightly ahead of same-term net absorption in 2013. Vacancy, however, should remain below 5.0% and rent growth should stay strong.

Suburban Northwest: Lewisville

  • Reis’ Lewisville submarket was very active in the recent past. A total of 2,310 market-rate units completed construction here over the two-year span 2009-2010.
  • While only 421 units in two projects delivered in 2011, activity is again on the rise.
  • In 2012, 1,243 units will complete in three projects, as described below.
  • Net absorption for 2011 all told was 760 units, nearly doubling new supply.
  • The first half of 2012 followed with virtually equivalent market-rate net absorption and new supply totals of 319 and 312 units.
  • Vacancy has remained favorable, ending the latest quarter at 6.4%, up 10 basis points for the period, down 50 year-over-year.
  • At $947 and $862, second quarter mean asking and effective rents were up fully 1.7% and 1.8% for the period following first quarter’s anemic performance.
  • The 312-unit Residences at the Collection at Highway 121 and Huffines Boulevard, Carrollton, completed construction in May.
  • The 568-unit phase VI of Austin Ranch will complete in September at Plano Parkway and Sumner Street. Construction commenced in November.
  • Also scheduled for a September finish is the 363-unit Cypress Apartments at 2436 S. Valley Parkway.
  • A February 2013 completion is scheduled for the 312-unit Platinum Castle Hills property at Windhaven Avenue and Josey Lane. Construction began in December.
  • Outlook. 2012’s 1,243-unit completion total will exceed the year’s projected net absorption sum by close to 200 units as the vacancy rate returns to 6.9%. Rent growth should remain substantially positive. A healthy but quieter performance is anticipated for 2013.

Suburban Northwest: Carrollton/Addison/Coppell, other

  • With vacancy at 4.7% and rents on the rise, the Carrollton/Addison/Coppell submarket is notably active with new development.
  • Reis reports 1,037 market-rate units under construction in four projects, three of which will deliver in 2013.
  • Finishing in February 2012 was the 347-unit Savoye at Vitruvian Park (phase II), within the huge Vitruvian Park development in Addison. No other rental projects will deliver this year.
  • The 391-unit Fiori at Vitruvian Park (phase III) is underway for completion in September 2013. Construction started in October.
  • A March 2013 finish is scheduled for the 353-unit Keller Spring Lofts in Addison following its November 2011 start.
  • Also in Addison, Behringer Harvard broke ground in December for its 121-unit Allegro II in the Addison Circle mixed-use development. Reis expects completion in March 2013.
  • The 172-unit first phase of Union at Carrollton Square broke ground in August at Main Street and Carroll Avenue, Carrollton. The completion date was not specified. A 125-unit second phase is planned.

Billingsley Company is developing its 1,000-acre Cypress Waters project in

  • Coppell with “the potential to house 10,000 units,” TREC reported in April.
  • More. “The first…apartments are expected to be ready early next year,” states the report. Reis reports 519 apartment and 151 townhomes currently planned for two phases.
  • The North Irving submarket. The first phase of AMLI Residential’s AMLI Escena delivered 330 units in Irving in January. A 110-unit second phase is underway without a specified completion date.
  • Provident Realty Advisors is building the 256-unit Lakepoint at Las Colinas project at 5349 Las Colinas Boulevard. Reis expects completion in April 2013.
  • An early May 2012 construction start date was reported by the Morning News for Trammell Crow Residential’s 317-unit Alexan Urban Center TOD project on Lake Carolyn “near DART’s new Irving rail line” in Las Colinas.
  • The 274-unit second phase of Lincoln Las Colinas began construction in May at Northwest Highway and Riverside Drive. Reis expects completion in January.
  • The Far Northwest/Farmers Branch submarket. At Inwood and Galeria roads, Dallas, the 327-unit Elan Dallas Galleria broke ground in April 2012 for an October 2013 finish.