Texas is made of legends. From trail-blazing pioneers to leading edge technologies, Texas has been at the forefront of excitement even before it joined the union as the 28th state in 1845.
Fun facts: 1
- From 1836 to 1845, Texas was an independent nation.
- The King Ranch in Texas is bigger than the state of Rhode Island.
- The first word spoken from the moon was Houston.
- There are more than 70,000 miles of highways in the Lone Star State.
- Of the nation’s top 10 largest cities based on population, according to the U.S. census, Texas scores a trifecta with three cities in the top ten: Houston, Dallas and San Antonio.
Texas employment numbers have driven growth for decades fueling demand for apartments. Recent statistics show job growth pushing even higher. According to a recent report from The Dallas Federal Reserve in June 2017, Texas job growth has again outpaced the nation so far this year.2
Q3 Houston Rents Up 2.3%
A visit from Hurricane Harvey in August 2017 has not slowed investor interest in Texas multifamily. In fact, Harvey has helped drive Class A apartment absorption higher while Class B recorded the highest occupancy of all the classes at 90.5%. While Harvey was certainly no picnic, 98% of the apartments properties reported fewer than 16,000 units damaged, according to apartmentdata.com.3 In Q3 2017, Houston rents gained 2.5%, the second largest increase second only to Nashville, according to alndata.com.4 We also saw some amazing firsts in Houston this year when the Houston Astros earned history by defeating the Los Angeles Dodgers, four games to three, to win their first World Series in franchise history, and the first team from Texas to do so.
“Houston is the second largest exporter of goods overseas — $84.1 billion worth in 2016 – only behind New York. We have 5,700 firms engaged in global trade whether it is a company creating transaction software or an engineering firm designing a new gas plant in Indonesia. Global trade supports between 350,000 and 450,000 jobs here. One of every seven jobs in Houston is from global trade and as the U. S. economy continues to pick up steam, that’s good for us,” said Patrick Jankowski, a regional economist with the Greater Houston Partnership.5
Houston is home to twenty-six Fortune 500 companies with KBR, Conoco Phillips and the megawatt power company, Dynegy among those who base their operations in the Houston MSA (Metropolitan Statistical Area). Prudent investors didn’t even wait for the grass to dry after Harvey before calling to inquire about value-add deals in Texas. They knew that even hurricanes can’t dampen the spirit of Texas.
Dallas-Forth Worth on Growth Fast Track
The Dallas-Forth Worth region is also on our investor radar. While Dallas and Houston have always had a friendly rivalry as to who’s city is considered the best, both cities get high marks for job growth and continued apartment demand. According to The Perryman Group’s most recent projections, Dallas-Fort Worth and the surrounding region remains one of the best performing economic regions, a pattern that is expected to continue for the next five years.6 Twenty-two companies of the Fortune 500 call Dallas-Forth Worth home including Southwest Airlines, Dr. Pepper Snapple and AT&T.
San Antonio Market Fueling Apartment Demand
San Antonio with it’s diversified and growing economy is fueling demand for apartments and luring investor interest. According to a Yardi Matrix report, rents increased 1.9% year-over-year through April 2017 with over 8,000 units under construction. Five companies on the Fortune 500 call San Antonio home including familiar names like iHeartMedia, USAA and Valero Energy.
Employment continues to propel the Texas economy and the future looks bright. There are many other hidden gems in cities across the state that deserve a more thorough look depending on your individual goals and multifamily investment strategies.
At Better World Properties LLC and The Better World Family of Companies, we manage, invest and identify multifamily opportunities throughout the state of Texas. If you are an owner of Texas apartment properties, we would love to talk with you about your management goals and improving your returns.
If Texas is not yet part of your apartment portfolio, we would like to sit down with you over an iced tea. We have a lot to share on this subject that you may find of interest. Texas is our passion. You can read more here about our team and our apartment life cycle solutions offered all under one roof.
Perhaps the outspoken frontiersman, explorer and Tennessee Congressman turned Texan, David “Davy” Crockett said it best, “I must say as to what I have seen of Texas, it is the garden spot of the world. The best land and the best prospects for health I ever saw…”7
Give us a call. Better yet come visit. We love to talk apartments.