Why You Should Invest in Texas Multifamily in 2024

Lauren Miles — Mon, 06 May 2024 21:54:10 +0000

TEXAS: Record Job Growth, Surging Demand, and Strong Fundamentals

Texas has become a top destination for real estate investors due to its thriving economy and attractive multifamily fundamentals. Major metro areas like Dallas-Fort Worth and Houston are magnets for corporate relocations and domestic migration, both key factors behind the state’s surging job growth and housing demand.

Here, we’ll dive deeper into population growth, job opportunities, and other core fundamentals that position Texas as (still) one of the most desirable states for multifamily investors in 2024.

Surging Population Means Increased Demand

Texas’ population grew more than any other state in the country between 2022-2023 according to the recent estimates from the U.S. Census Bureau. Of the 1.6 million people the nation gained between July 2022 and July 2023, nearly 30% are Texas residents.

Dallas-Fort Worth, Houston, San Antonio, and Austin rank among the top 10 Metro Areas with the biggest population increases from 2022 to 2023.

Although Nearly 70% of residents live in the state’s four largest metro areas, according to estimates from the Texas Demographic Center, a considerable portion of Texas’ growth is happening in ‘suburban’ counties, especially in the DFW metroplex.

Texas holds eight out of the top ten counties for annual growth of residents from 2022 to 2023, with Harris, Collin, and Montgomery counties holding the top 3 positions.

The counties of Collin, Denton, and Tarrant, located in the Dallas-Fort Worth area had significant gains, with Denton becoming the seventh county in Texas to surpass 1 million residents.

Record Job Growth Creates Opportunities for New Residents

The primary forces driving migration to Texas are the job opportunities the state offers its residents to earn a reasonable income in some of the nation’s top booming industries.

For the second year, Texas has led the nation with the most Fortune 500 headquarters, growing to 55 in 2023. The Lone Star State made up more than 10% of the Forbes Fortune 500 list and featured 14 companies in the Top 100. The greater Houston metro area is No. 2 in the Nation with 25 Fortune 500 headquarters, and the Dallas-Fort Worth-Arlington metro area is No. 3 with 24.

With companies including Exxon Mobil, CBRE, Caterpillar, Hewlett-Packard, and Tesla having moved their headquarters to Texas in recent years, the state reported 33 months of uninterrupted job growth as of November 2023. Companies are moving and expanding their presence in Texas due to the strong labor pool and the absence of any state income tax.

Between September 2022 and October 2023, Texas’s employment grew by 435,800 positions as its annual growth rate of 3.2 percent outpaced the nation by 1.1 percentage points. During that time, Texas recorded historic milestones in job count, boasting 14 million total jobs.

Additionally, the cost of living in Texas is around 8% lower than the national average, making it an attractive option for those considering relocation.

Image Source: Texas Economic Development & Tourism

What It All Means: Opportunity

It’s no secret that 2023 was an interesting year for real estate, particularly for new developments such as ground-up multifamily construction. Securing financing for new multifamily construction has been challenging as banks have reduced real estate lending due in part to the outflow of deposits to money market funds. Further, the normal institutional investors many developers rely upon have put investing on hold until they shore up other areas of their portfolio. This tightening of capital has drastically slowed new project starts as many developers are unable to secure proper financing to proceed with projects.

According to GlobeSt.com, new multifamily construction starts have dropped across Texas from 2022 at a sizable margin. Houston multifamily starts have fallen by 79%, Austin by 74%, and Dallas-Fort Worth by 64%. With fewer units coming online and the migration to Texas showing no signs of slowing, this will create a future supply and demand imbalance that, to investors, can mean only one thing - opportunity.

Once the multifamily projects currently under construction are completed and leased up, few new properties are coming online behind them to meet the demand of the current population growth. At BV Capital we expect to see this supply-demand imbalance materialize in 2025, so the construction projects that begin today will provide some of the only new multifamily properties that will come online in 2025. These projects will be able to demand higher rents as they will be the only new properties in their markets.

“We are particularly bullish on Class A multifamily builds in Texas, given the high demand and constrained supply — an imbalance that has historically driven rents higher, increasing net operating income (NOI) and thus increasing returns for investors."

rob anderson - BV Capital president

As you devise your investment strategy for 2024 consider the strong fundamentals in the Texas real estate market. With the state’s steady population and job growth anchored by its affordability, the only thing brighter than Texas’s past is its future.

Article Sources: BEST EVER CRE, Texas Tribune, Commercial Observer

Data Sources: U.S. Census Bureau, Texas Demographic Center

invest in texas real estate

BV'S ground-up construction offerings

Rendering Images of The Alexander - BV Developments

No. 1 Metro Areas with the biggest population increases from 2022 to 2023

dallas - fort worth Suburb: The Alexander

Bridgeview has broken ground on The Alexander, a new ground-up construction of 388 “Class A” units in the affluent DFW suburb of Mansfield, TX where median household income is more than double that of the overall submarket. The Alexander will benefit from being the only wrap project in the area and included as part of the Shops at Broad, a mixed-use retail and entertainment district.

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The post Why You Should Invest in Texas Multifamily in 2024 appeared first on BV Capital.

BV Capital and Archway Properties Launch Net Leased Fund

Lauren Miles — Tue, 13 Apr 2021 16:02:11 +0000

BV Capital, Archway Rolling Out $50M Net-Leased Fund, Seeds Portfolio with Off-Market Acquisition

DALLAS – BV Capital and Archway Properties have launched the BV Archway Real Estate Income Fund, jump-starting a $50 million equity play with the off-market acquisition of a triple net-leased asset in a 111-acre business park in the Houston market.

The fund is planning to acquire 10 to 12 single-tenant NNN-leased properties in Texas, leveraging its equity to build an institutional-quality portfolio of commercial assets. BV Capital projects it will be fully invested in one to two years.

The fund has seeded the portfolio with its first holding – a 79,684 sf Floor & Décor showroom and warehouse in Park Air 59, a mixed-use development located at the eastern entrance of Bush Intercontinental Airport. The Archway-developed project, which delivered in late 2019, is secured by a NNN lease with a publicly traded company that's ranked as one of Fortune 100's fastest growing companies.

"Floor & Décor is pandemic-resistant, as evidenced by its stellar growth in the past year. It's a strong start for the BV Capital Archway Fund portfolio," says Rob Anderson, president of Dallas-based BV Capital, a member of the Bridgeview family of companies. "Archway Properties truly is a great partner for sourcing and acquiring properties."

The fund's strategy calls for an anticipated five-year hold. The team is focused on sourcing build-to-suit developments and one-off acquisitions of newer buildings, which are NNN-leased for the long term to creditworthy tenants in historically strong markets like Dallas/Fort Worth and Houston.

BV Capital is projecting a 7% annual preferred return for the new investment vehicle, which is coming to market as a real estate alternative for accredited income investors. The fund is designed to produce a stable monthly income for investors throughout the hold, with an opportunity for upside on the exit.

BV created this fund to produces cash flow for accredited investors with tax benefits minus the turbulence of today's markets.

About BV Capital

BV Capital is a member of Bridgeview family of companies based in Dallas. Founded in 2011, Bridgeview is a private veteran-owned real estate development and investment company. BV Capital offers direct investments historically only available to institutions to real estate developers and sponsors of major commercial real estate assets.

About Archway Properties

With offices in Houston and Dallas, Archway Properties offers a broad range of real estate services to its clients and partners including acquisition, development, project management and asset management. Our principals have successfully completed projects with a total value in excess of $2 billion.