Construction Pipeline Continues Its Growth
It has been six months since checking in on the Greater Fort Worth construction pipeline, and in that time, activity has continued to ramp up. Not only have recent deliveries increased in number, but more than 5,000 units have been added to the upcoming pipeline in the last six months. With this in mind, let’s take a closer look at deliveries across Greater Fort Worth for the sixth month period starting in August 2020 through January 2021 as well as projects still under construction.
About 4,700 new units were delivered in the six-month period. This represented a significant increase from the roughly 2,000 units delivered in the same period a year ago but was closer to the approximately 3,800 new units delivered from August 2018 through January 2019. Net absorption more than doubled over the last six months compared to the same six months a year ago, mitigating the average occupancy decline resulting from those new units. Even so, average occupancy declined by 1% to close January at 90%.
More than half of Greater Fort Worth submarkets added units in the last six months. The Central Fort Worth submarket continued to lead the way in deliveries with about 1,500 new units introduced. Consequently, average occupancy fell by 3% to 80% overall for the area. The North Fort Worth submarket, with around 900 new units, added the second-most new supply. These new units similarly pressured occupancy and sent the average down 3% to 87%. The North Arlington area added about 700 new units which sent average occupancy down by 5% to 90% overall.
The Grapevine-Roanoke-Keller region was the only submarket to materially add to average occupancy. After adding only one new property of a little more than 400 units, average occupancy rose by almost 4% to 87%.
Projects identified as being under construction rather than in some other stage of the pipeline are projects that are being built but not yet leasing. About 7,500 units ended January in this phase, or about 22% of the total pipeline. As with deliveries, Central Fort Worth sits atop the list for units under construction with about 1900 in that phase. Some new submarkets fill out the remainder of the top spots. There were 1,200 units under construction in the South Arlington area at the end of January and around 1,100 in the Denton-Corinth submarket.
Construction activity is more widely distributed in this phase of the pipeline than was observed for submarkets with new units delivered over the last six months. All told, more than 80% of Greater Fort Worth submarkets closed January with units under construction that had not begun leasing.
Dallas – Fort Worth has been extremely active over the last handful of years when it comes to new supply, and that dynamic will not be changing any time soon. The Greater Fort Worth side of the metroplex has lagged the Greater Dallas side in volume, but the area continues to ramp up deliveries and overall pipeline units.
Unlike many markets around the country, Greater Forth Worth has not only added more new units from August through January than in the same period a year ago, but net absorption was significantly higher as well. This, along with the fact that 40% of the construction pipeline has yet to break ground, gives the area more flexibility moving forward through uncertain times compared to some others.