Dallas, Texas – In an affirmation of NexMetro Communities‘ robust expansion trend within the Dallas-Fort Worth (DFW) area, the luxury build-for-rent firm has successfully concluded the escrow process on two pivotal sites located in Anna and Cleburne during the previous month. This crowning achievement punctuates a series of ambitious initiatives undertaken by the company in North Texas.
NexMetro has reached 3,000 homes
Since the inauguration of its first DFW development, NexMetro has embarked on a significant surge in local residential construction. Its portfolio now encompasses the completion and ongoing development of 3,000 homes. This impressive tally incorporates structures already erected, in conjunction with those presently in the throes of construction.
One such noteworthy endeavor is the imminent inauguration of Avilla Boat Club, situated in Fort Worth. This community is set to feature a 107-home gated enclave, steeped in luxury, and designed specifically for the rental market, according to recent press information. Additionally, the Anna and Cleburne sites are projected to become available for leasing by the latter part of 2024, extending the reach of NexMetro’s innovative home solutions. This comes at a time when Dallas-Fort Worth is facing affordable housing crisis.
“Consumers are increasingly choosing to rent but don’t want to sacrifice the lifestyle of a home that they’ve worked to achieve,” Steve Fritzer, managing director for NexMetro’s DFW Division, said in a prepared statement. “We continue to see considerable demand in submarkets across Dallas and Fort Worth for our best of both worlds lifestyle offering.”
NexMetro unveils plans for Anna and Cleburne further building the Dallas-Fort Worth portfolio
The company’s advances were further cemented by recent developments in the municipal sector. The Anna City Council has expedited NexMetro’s progress by granting approval for a mixed-use residential and commercial development. The planned construction will span a considerable 65 acres of vacant land adjacent to U.S. Highway 75 in the rapidly burgeoning city.
The ambitious development is meticulously segmented to encompass 27 acres dedicated to commercial growth, artfully tailored to accommodate restaurants, local retail establishments, medical offices, banks, and an array of other retail and services. The project also incorporates a residential component, distinctly designed by Phoenix-based NexMetro. It is slated to comprise a 24-acre residential cottage community featuring 211 detached single-family and duplex units. The individual units will be characterized by private backyards and a range of one to three bedrooms per unit.
The Dallas-Fort Worth (DFW) area has emerged as a national vanguard in the realm of build-for-rent home construction, a sector that has been exceptionally dynamic despite nascent indications of national demand attenuation for this burgeoning asset type.
According to an incisive report recently released by RentCafe, a subsidiary of Santa Barbara, California-based Yardi Systems Inc., build-for-rent homes achieved an unprecedented zenith in 2022, with 14,541 units completed across the nation. This figure heralds a tripling of ongoing constructions, marking a considerable stride in the industry.
DFW has distinguished itself with the consummation of 2,773 build-for-rent units within the same period, encapsulating a staggering 441% augmentation year-over-year, and culminating in a 10-year apex. The robust momentum of this sector within North Texas has seen the number of build-for-rent homes more than double in a succinct five-year span, surging by an exacting 102%. The addition of 3,955 units between 2017 and 2022 has culminated in an accumulated supply of 7,843 units across DFW. This imposing inventory positions the region with the second-largest supply in the nation.
Furthering the ascendancy of DFW in this sector, an auxiliary 4,350 build-for-rent units have been delineated for construction, constituting the second-largest impending count of homes designated for rent in the entire country.
However, as exuberant as the construction pipeline for build-for-rent homes appears, certain contractions have surfaced on the national horizon. Demand for these novel home types has exhibited a discernible decline from the elevated levels witnessed in recent annals.
The multifaceted and often discordant nature of the data sources on build-for-rent construction leads to widely varying estimates. Nevertheless, reflections on the broader housing market manifest a perceptible cooling in new single-family rentals across the nation in successive quarters. Precisely, build-for-rent starts in the opening quarter of the present year were found to be 7% less when juxtaposed with the corresponding quarter of 2022.
The National Association of Home Builders has proffered an estimate indicating that the four quarters culminating in Q1 2023 witnessed the commencement of 69,000 single-family rental home constructions. This figure delineates a 17% increment from the 59,000 estimated starts in the preceding four-quarter sequence.
While the palpable vigor in the build-for-rent sector within DFW paints an optimistic panorama, a closer examination reveals a complex and nuanced scenario, underpinned by shifting market dynamics. These multifarious forces may well presage a reconfiguration of growth trajectories, mirroring both the inherent volatility and the inexorable evolution of contemporary real estate landscapes. The trends emerging from DFW may provide vital insights, not merely into regional dynamics but as a reflection of broader national tendencies within the build-for-rent sector.