HOUSTON – Apartment developers are paying higher prices to acquire sites for new projects.
Prices for multi-family development sites in major Texas markets, such as Houston, Dallas and Austin, have doubled since the beginning of 2010, according to Deal Sikes & Associates, a Houston-based commercial real estate valuation firm.
Since vacant land is a rarity in these popular infill locations, apartment developers have been buying and demolishing obsolete commercial structures, such as small office buildings, dilapidated apartments, churches or warehouses.
With the higher land prices in the most desirable areas, developers are opting to build mid-rise and high-rise projects. Higher occupancy, rising rents, and significant job growth have provided the fundamentals for a healthy multi-family market in Texas.