Two years ago, GlobeSt.com took a look at the state of Dallas-Fort Worth's apartment market and said, in short, Lookin' good
. Occupancy rates were on the rise, as were rents -- up to an average of $724 a month. But today, things are a little different
: Rates are higher than they were in '07 (up to $749 around North Texas), but that's actually the result of across-the-board rent cuts in recent months, precipitated by a drop in occupancy rates (down to 89.8 percent) due to a glut of units. And folks who keep track of such stats warn that thousands multifamily units set to open toward year's end won't help matters any. Which is but one issue among many facing the complex complex business, says Tom Burns, associate partner in Hendricks & Partners
' Dallas office:
"$300 billion in loans will come due during the next four years," Burns comments. "The majority of those buildings will need to be restructured or sold during the next three to five years." But the problem facing many of the owners, he continues, is the refinance-foreclosure duo, meaning assets will come to market way below market value. "Up to this point, we haven't seen a whole lot of that, but we think the tsunami will hit beginning the end of June 2010," Burns comments.