Almost 30,000 new apartments are scheduled to hit the market in North Texas this year, which should help the region maintain its title as the top multifamily construction market in the country.
Even so, permits for new Dallas-Fort Worth area apartments are down from last year’s numbers, according to RealPage Inc., a Richardson-based real estate software and analytics company.
KWA Construction, a Dallas-based general contractor specializing in multifamily developments, this month wrapped up Phase V of Hebron 121 Station, a $300 million resort-style community in Lewisville developed by Huffines Communities. KWA also built the third and fourth phases of the 90-acre project.
The latest $35.5 million phase incorporates 22 Big House apartments – a concept created by Dallas-based multifamily architect Humphreys & Partners Architects – and 13 townhomes. It spans 301,931 square feet and consists of 35 three-story, wood-framed buildings that contain 272 multifamily units.
In the interview that follows, Brian Webster, president of KWA Construction, discusses the DFW multifamily construction market in general and the Hebron 121 project specifically.
What is the demand in DFW for projects of this type and apartments in general?
Very strong. When we have units available, they’re ready to be leased from an inventory standpoint. If we look at the apartment metrics around absorption in DFW, absorption has been really good. We continue to have in-migration and job growth in the DFW MSA. The fundamental metrics are still really strong for our region as it relates to support for the apartment community.
Did the apartment construction market get overheated?
All of the fundamentals are there to show that we’re not overbuilding. We still need 19,000 units a year in the DFW metro just to keep up. People keep moving here. Somebody told me it’s like a jumbo jet lands at DFW Airport every day and the people don’t leave. That’s a wild thing to think about. That many people are coming every day.
What did the fifth phase of Hebron 121 entail?
Hebron Phase V was a 272-unit property with the majority of it being comprised by Big House units with the remainder being four- and six-unit townhome buildings, three stories tall.
What is the Big House concept?
The Big House is a trademark design by Humphreys and Partners Architects. They can take this design and apply it to a lot of different styles. Other elements related to the Big House are that all the units are 10-unit buildings, everybody has a garage, and everybody has direct access into their unit from the garage. You have an internal staircase so you’re not exposed to weather. There are no breezeways. So it’s a very private living arrangement for an apartment building.
What differentiates Hebron 121 Station overall?
I would say the guys at Huffines Communities who developed the entire project have done a great job of developing a community in Lewisville that really stands on its own and is a place people want to live at. It has a wonderful resort pool and amenities all throughout the project.
What other trends are you seeing in multifamily construction in DFW?
We continue to see strong activity in the A to A-plus market rated projects – specifically projects with bigger densities, meaning units per acre. Those have been the ones that have been most likely to move forward.
We do continue to deal with rising costs throughout the supply chain in building apartments. They continue to get more expensive from a cost basis. That’s a product of this continued elevated level of activity. The demand for labor has been very strong. Therefore, it costs more than it’s ever cost before, and we really have to work hard to make budgets work and to hold those budgets.
How do you feel about the DFW market going forward?
I’m cautiously optimistic. Even if there are some headwinds to the market, our fundamentals are so strong that I think that the apartment side is going to continue to do well.
Take the 19,000 units needed annually. If you do a little bit of math, that’s 76 projects at 250 units each needed annually.
This interview has been edited for brevity and clarity.
View the full article on the Dallas Business Journal.