May Industry Update

Posted By: Jordan Brooks Dimensions Online, Industry,

It’s Raining New Units in Greater Fort Worth

The last few quarters have represented a return to Earth for Greater Fort Worth multifamily, down from the stratospheric heights of the industry recovery in 2021 and early 2022. In the first few months of 2023, the downward trend has not reversed, but movement in a couple of key metrics did improve slightly relative to last year’s final quarter.

All numbers will refer to conventional properties of at least 50 units.

New Supply and Net Absorption

Almost 3,000 new units were introduced across Greater Fort Worth in the first three months of the new year. This level of new supply was not only more than in any opening quarter in the last handful of years but was the highest new supply total of any quarter since the first three months of 2013. Deliveries were fairly concentrated, with just five of the twelve ALN submarkets for Greater Fort Worth seeing any new units in the period. Central Fort Worth led the way with more than 800 new units introduced, but areas such as North Fort Worth and Richland Hills – Hurst – Haltom City each also added more than 600 new units.

Unfortunately for Greater Fort Worth's average occupancy, this surge in supply coincided with apartment demand still in hibernation. A net loss of around 400 leased units in the quarter made the opening period of 2023 the third quarter in a row to see negative net absorption.

The glass-half-full take on the quarterly absorption result would be that January was the real pain point with February and March averaging out to slightly above zero. The less optimistic take would be that March demand underperformed February at a time when macro headwinds have made the industry especially reliant on the buoyancy of seasonal trends this year. March, and to a greater extent April, is typically the time of year when slower winter demand begins to give way to the more active spring and summer period. For Greater Fort Worth multifamily, the March checkpoint has been missed.

The effect of a much higher new supply and non-existent apartment demand was a 1.6% decline in market-level average occupancy. The period finished with occupancy slightly below 89% - the first quarter to close with occupancy below 89% in the last decade.

Average Effective Rent and Lease Concessions

The average effective rent for new leases remained unchanged in the first quarter at about $1,425 per month. By holding serve to begin the new year, two consecutive quarters of negative effective rent growth were avoided. Given the occupancy decline in the period and the unusually low market average occupancy – rent growth certainly could have been negative again. The volume of new units, most of which enter as Class A, helped get quarterly rent growth back to zero for the market.

To this point, price class rent growth was negative in both the Class C and Class D groups in the quarter with Class B properties managing only a thirty-basis point gain. For Class A properties, average effective rent surged by nearly 3% despite net absorption being slightly negative within that subset.

From a submarket perspective, rent change was evenly split. Six Greater Fort Worth submarkets found themselves in negative territory for the period while the other half managed to capture some rent growth. North Fort Worth, Central Fort Worth, and Grapevine – Roanoke – Keller were the three regions to suffer average effective rent declines of 1% or more. On the other side of the coin, both the West Fort Worth and Denton – Corinth submarkets achieved rent growth of 2% in the period.

As a response to softening occupancies, Greater Fort Worth operators pulled the lease concession lever. A 40% quarterly increase in the availability of discounts for new residents brought the share of conventional properties offering a lease concession to about 20%. Availability closed the quarter back at the same level as the end of the first quarter in 2019 but still below the pandemic-era peak above 30%.


Fort Worth multifamily performance in the first quarter was an example of a dynamic that will not be uncommon this year. In many in-migration destination markets which have grown robustly in recent years, a turbo-charged supply pipeline is finding a very different environment than was the case just twelve or eighteen months ago.

In the case of Greater Fort Worth, the new supply has been relatively high for a few years now. That activity has already taken a toll on occupancy after a notable demand cool-off that began in the first half of last year. This year is expected to see even more deliveries than in 2021 or 2022, and that new supply is almost certain to exceed net absorbed units. For a market with average occupancy already unusually low, further supply pressure probably means a continued rise in lease concession availability along with the first year with average effective rent growth below 5% since 2020.

Jordan Brooks
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.