Market Update: Jan 2022
Greater Fort Worth Submarket Spotlight
It has been a historic year for the multifamily industry, and Greater Fort Worth has certainly been no exception. An average occupancy increase of more than 3% through November combined with an average effective rent gain of more than 15% resulted in a net rent gain of 20% at the market level. At the submarket level, the net rent per unit change metric ranged from 33% down to 9%, and it is these differences at the submarket level that will be examined further here.
As always, numbers will refer to conventional properties of at least 50 units.
New Supply and Net Absorption
All but two submarkets added at least one new property through November of this year, and a total of around 6,000 new units were delivered across the Greater Fort Worth market as a whole. This output of new supply was down from 2020 but within the range established over the last five years. South Arlington and Denton – Corinth were the two areas with the most new units in the period – with right around 1,200 units each. Other notable submarkets were focused in Fort Worth, specifically North Fort Worth, Central Fort Worth, and South Fort Worth.
While new supply was basically typical relative to recent years, apartment demand was anything but. Net absorption of approximately 11,000 units was not only well beyond the roughly 6,600 units through November of 2020 but was actually more than 2019 and 2020 combined. Five submarkets absorbed at least 1,000 net units in the period, and only East Fort Worth lost rented units on a net basis to the tune of about 20 units. Central Fort Worth managed to lease a little more than 2,600 previously unoccupied units to lead the way for the market, followed by net absorption of about 1,800 units and a,600 units respectively in North Fort Worth and Grapevine – Roanoke – Keller. South Fort Worth and Denton – Corinth, each with just over 1,100 net units absorbed, were the other two submarkets to top 1,000 net units.
Average Effective Rent and Lease Concession Availability
Average effective rent growth through November was five times that of the same portion of either 2020 or 2019 and triple the growth of 2018 and 2017 for Greater Fort Worth overall. Two submarkets, North Fort Worth and Grapevine – Roanoke – Keller touched 20% appreciation. South Arlington was only very slightly behind those areas, while four other regions topped 15%. Only Central Arlington, with a gain of just under 9%, failed to top 10% average effective rent growth in the period.
Around 11% of conventional properties were offering a discount for new leases at the end of the month, a level of availability much lower than that of any November going back more than five years. Concession availability dropped across all Greater Fort Worth submarkets compared to January, with multiple areas of the market closing the period with 5% or less of conventional properties offering a discount. At the other end of the spectrum, Central Fort Worth and West Fort Worth each stood out with around 20% of properties offering a lease concession package. For perspective, these submarkets would be had less discount availability than the market overall for November in each of the previous three years.
Incredible apartment demand has profoundly impacted the multifamily industry nationally, and Greater Fort Worth has been no exception. The extent of the rent growth in so short a time is certainly a double-edged sword, but one encouraging development has been the broad-based nature of the demand and of the growth.
Only one submarket suffered a (very slight) net loss in rented units through November. Lease concessions are increasingly scarce and only one submarket ended November with even 20% of properties offering a discount.
The net result has been only one submarket failing to already be in double-digit territory for average net rent per unit growth through November, and the lone exception closed the month at 9%. These gains, while a reflection of strong fundamentals and the benefit of pent-up 2020 demand, will certainly exacerbate affordability concerns. On the positive side, well-rounded results as opposed to more skewed performance in which a few key submarkets lift the overall market numbers bodes well for Greater Fort Worth.
Senior Market Analyst – ALN Apartment Data
Jordan Brooks is a Senior Market Analyst at ALN Apartment Data. In addition to speaking at affiliates around the country, Jordan writes ALN’s monthly newsletter analyzing various aspects of industry performance and contributes monthly to multiple multifamily publications. He earned a master’s degree from the University of Texas at Dallas in Business Analytics.