HOUSTON--()--Deal Sikes & Associates, one of the nation’s leading real estate valuation and counseling firms, reports that prices for multi-family development sites in urban Texas markets have doubled since 2010 as apartment developers rush to build new projects.
“After several years of inactivity, apartment construction exploded as the market has recovered in many locations. The demand from tenants is high and new projects lease up quickly with rents that often exceed pro-forma expectations”
Demand for well-located urban apartment development sites has skyrocketed in Texas and in other parts of the nation. Since vacant land is a rarity in these urban infill locations, apartment developers have been buying and demolishing obsolete commercial structures, such as small office buildings, dilapidated apartments or warehouses.
Since the beginning of 2010, apartment development sites have doubled in value in Texas markets such as Houston, Dallas-Fort Worth and Austin. In the last 12 months alone, prices for these properties have risen 25 percent in urban Texas, according to Houston-based Deal Sikes & Associates. A number of other markets around the nation, particularly on the East Coast, have experienced similar sharp price increases for development land.
“After several years of inactivity, apartment construction exploded as the market has recovered in many locations. The demand from tenants is high and new projects lease up quickly with rents that often exceed pro-forma expectations,” said Matthew Deal, principal of Deal Sikes & Associates. “With these promising market dynamics and renewed support from lenders, there has been a significant increase in property purchases by multi-family developers in recent months.”
Real Estate Investment Trusts and established merchant builders are leading the multi-family construction rebound. To justify the higher prices for development sites, the developers are required to build high-rise or mid-rise residential projects.
With experience in evaluating over $1 billion in apartment developments across the country, Deal Sikes & Associates is one of the nation’s leaders in multi-family valuation services.
Deal Sikes & Associates, based in Houston, provides real estate valuation and counseling services for eminent domain initiatives, transactions, estate tax planning, due diligence research and litigation support. The principals of Deal Sikes & Associates provide real estate counseling and valuation services for governmental agencies, real estate companies, law firms and corporate clients across the nation. www.DealSikes.com