In light of PIMCO's recent article and what appears to be a general consensus that over-development in this cycle is localized to a handful of specific property types in specific markets, would anyone care to throw out some markets you think are experiencing a little over-development?
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NYC and some of the Burroughs. I believe there's something like 50,000+ units that still have to come online.
New Haven, CT, is about to be way overbuilt - already rumors of a particular builder about to go under.
I think Boston is lagging behind NYC so maybe 1-2 years for it to reach the same point. In my opinion there's still room for more supply in the high-end condo market in Boston but the projects that broke ground recently should take care of that.
Not intimately familiar with many other hot markets.
SF office San Jose multi Downtown LA multi
In response to DT LA, I agree, EB-5 is fueling a lot of it (e.g. Metropolis) and if you count Arts District I dont expect it to last through the cycle.
Can you expand on the DTLA MF construction?
Amen. When that Palmer project on the 110 caught on fire a couple years ago I figured it might have been a convenient way for him to reverse course
Apparently they got right back to it
http://la.curbed.com/2016/2/18/11080104/los-angeles-developer-lawsuit-d…
Austin, Seattle, Bay Area, Atlanta
Not too sure about Austin being overbuilt, maybe with the exception of hotel (lot of that in the pipeline). You talking about multi?
Multi family isn't overbuilt either. Austin is just growing at a ridiculous rate. New apartments/condos are still going up daily and rents are going with them. Anything south of campus and north of Town Lake can upwards of $2000 for a 700sf 1BR. It's crazy.
The Domain is also really taking off too, moreso than a few years ago.
Austin is a great market and is ridiculously hot, however I second that that the hotel market there is out of control. Other product types there are good, and condos in particular are on fire (in a good non-NYC type of way). If you go on a site tour there, you'll notice nothing but hotels when you look around and there are thousands of keys still in the pipeline.
In what product types? Atlanta in particular still has room to grow.
Those may be the hottest markets, but that doesn't mean they're necessarily overbuilt.
NYC currently actually has a lot of residential inventory and rents have stabilized and are now even falling, from what I understand.
Very much this
Whole lot of Texas in this thread. If y'all are going to be at the ULI conference, let me know: http://www.wallstreetoasis.com/forums/2016-uli-fall-meeting-dallas-texa…
I'll be at the ULI Conference in Dallas. Looking forward to it. The tours on Monday should be pretty cool.
I still have a few months left for my student ID to be valid. Any passes for students? I'm working in finance but looking to crack in to Dallas real estate. Hines/Hillwood/TCC didn't work out this time around.
I'm sure there's a student discount at least
NYC Hospitality Phoenix Flex Office Houston Office DC Office
Houston office? What submarkets?
For those of y'all that are still bullish on Dallas. What submarkets y'all lookin at? I always find Dallas difficult to underwrite cus it's so pockety and spread out
So I transitioned to M&A and therefore not a RE guy anymore, but I think Dallas Midtown is going to be super cool when they finish it in a few years. I know the guy that runs the architecture firm that is expected to do most of the design and they are like the Kings of mall/MUD architecture. My guess is that it will cause the Galleria to either be refurbished or torn down and redeveloped within 10 to 15 years of completion.
I think FW also is on the rise, pretty much anywhere within 5 miles of downtown from what I understand though that may be starting to taper off a bit. West 7th was practically nonexistent like 5-7 years ago when my wife was in school at TCU and now it's a quality up-scale MUD. The Magnolia area is also pretty cool, had a Bishop Arts type revival. We've got some friends who have bought old properties over their for literally like a dollar since the city doesn't want them torn down and wants the original architecture to remain. Not even remotely CRE relevant but makes for a cool project, think they both flipped a few and live in one each.
Uptown – Arguably the premier dirt within DFW. Office rents near or exceeding $50/sf is at record levels for Dallas. All new inventory for apartments is coming online >$2.50/sf. Land is at a premium, and with property taxes at 2% of value per year, high-end developments are the only ones making sense for developers.
Bryan Place – This neighborhood is east of Uptown on the other side of I-75. Has also seen very high levels of multifamily development. Prices are lower than Uptown, but the area is gentrifying very quickly. The post college crowd that used to move to Uptown are shifting here due to price. Huge Baylor medical center is also fueling growth.
Victory Park - Master planned development surrounding American Airlines arena. Predominantly high rise condos/apartments. Rents rival Uptown do to the buildout specs, but not as high of demand due to lack of area amenities (although they are finally getting a grocery store). Boarders the West End neighborhood of Downtown which is rather seedy.
Design District – Former industrial area west of Victory Park. Ton's of apartment construction. Not a walkable area, but highway access makes it appealing. One of the more affordable up and coming neighborhood.
Oak Lawn – This is Dallas gayborhood, and located north west of Uptown with Turtle Creek acting as the defacto boundary. Lots of apartment development on the north side of this district near Maple Ave and the Tollway due to proximity to Parkland Hospital.
Knox/Henderson – Located north/northeast of Uptown. Generally, has catered to the crowd that has outgrown Uptown. New construction apartments are being priced similar to Uptown.
The 75024 Zip Code – Laugh all you want but Frisco, TX which is some 30 miles north of Dallas is one of the hottest markets for housing/jobs. Plano which has been established for years has recently landed Toyota North America and FedEx office, and are moving their headquarters there, and Liberty Mutual is consolidating a huge operations center as well as JPM Chase. The Legacy West development is a $3-billion-dollar project. Since Plano is getting low on developable land, a lot of the growth is going to occur in Frisco, McKinney, etc.
This is an awesome market narrative. I cover Dallas from afar so my take on it is a little different than a local's. Quick semi-unrelated questions, do you ever see taking DART up to Toyota as being a common thing? We've looked at some TOD-type stuff in Plano and own other assets in Knox-Henderson, but ridership today is so anemic that it is hard to imagine any large-scale usage. Just interested in your two cents.
The closest Dart Station to the Legacy West development where Toyota is going is Parker Road so it is a good 10 miles apart so it seems unlikely. Legacy West is adjacent to the Dallas North Tollway which will feed a good amount of people who are willing to pay a premium to avoid congestion on I-75.
Dart ridership is generally for people who are willing to accept a longer commute at a lower price, tollway is the opposite.
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