The Dallas-Fort Worth multifamily market is entering a new phase. It’s not the same environment we were in a year ago, and definitely not the same market it was three years ago. Capital markets are still tight. New construction is slowing. National and global events are causing instability and deferred decision-making. But DFW’s fundamentals remain strong. We’re at a moment when value is starting to re-emerge and patient capital can finally return to work.
We recently made our first acquisitions in years: three Class A multifamily properties across Austin, DFW, and Miami, totaling over 850 units. All are newly built, in prime submarkets, and purchased well below replacement cost. Each deal came with a special situation—something that created opportunity. These were not marketed broadly, and they weren’t priced for perfection. They represent the kinds of transactions that reappear when a market is resetting.
And make no mistake—this DFW market is resetting.
Demand Is Not the Problem
DFW gained nearly 500,000 people between 2020 and 2023, more than any other metro in the country. Growth like that isn’t a short-term trend—it’s a structural virtuous cycle. Jobs have followed the people, with DFW posting 11 percent employment growth since 2020. And more jobs mean more renters.
At the same time, the cost of homeownership has jumped. Mortgage rates are high, and insurance costs are even higher. It now costs about 60 percent more to own a home in Dallas than to rent. That spread is way up from the days of low interest rates, and it isn’t narrowing anytime soon. The natural pipeline from renting to owning has slowed, so demand for quality rental housing remains strong and sticky, especially in well-located areas.
Add in the 11.5 percent population growth projected over the next five years—which should propel DFW to the third largest metro in the U.S. in short order—and the long-term outlook for multifamily in DFW is clear.
But Supply Is About to Pull Back
We’re starting to see the effects of capital market stress on the supply side. Construction financing for new multifamily product is available, and the all-important regional banks are back lending again after being largely on the sidelines for two-plus years. However, rates are higher, and more equity is required than a few years ago. Many deals penciled out two years ago just don’t work today. It’s actually a pretty simple math problem, and there are no easy answers to making the formula quickly square up again.
All this difficulty is going to show up in the data. Projections in real estate are usually unreliable, but here’s one that’s very predictable: deliveries in a 24-month horizon. That’s because if a project isn’t started today, it’s not delivering for at least 18 months. So we know that there will be a severe deceleration in new deliveries as early as next year. The market will start to tighten again. And that’s where things get interesting.
We’re already seeing high-quality, newly built assets trading at prices 30 percent below their 2021 peaks—and well below replacement cost. That dynamic rarely lasts long. Eventually, capital comes back, pricing resets, and new development makes sense again. But right now, this window offers real opportunity for investors who know how to operate.
A Shift in Our Strategy (Again)
From 2005 to 2017, we acquired more than 20,000 multifamily units. In 2018, we shifted our strategy. Asset valuations were climbing, and new development offered better relative value. We leaned into building and delivered more than 7,000 new units while selling off about 80 percent of our legacy portfolio between 2018 and 2022.
We didn’t see the pandemic or interest rate spike coming—but that pivot served us well. Development gave us control over design, execution, and long-term basis. It insulated us from the overheated buying environment.
Now, we believe the cycle has turned again—not because rates have fallen or sentiment has recovered—but because values have reset. Prices have corrected, and fear has created dislocation. That’s when disciplined buyers should step in.
We’re not calling the exact bottom. But we’ve been through multiple cycles, and one rule has always held: real estate downturns don’t last forever. They end with a whimper, not a bell ringing. And they tend to die of old age. We’ve now entered year four of this downturn: that is a LONG time for a down cycle. At some point, investors see blue skies again. Many of the same investors sitting on their hands now were pounding the table for 3 percent cap rate deals four years ago, so we know that appetites can pivot.
What Comes Next
We’re back on offense—but we’re not chasing deals. We’re looking for assets with clear downside protection, strong submarket dynamics, and long-term upside. We’ll also keep building where and when it makes sense. As supply tightens and rents stabilize, good development will once again be viable. It already is within certain parameters. But we’ll stay very selective.
The broader DFW commercial real estate market is in transition. Lending momentum is picking up. Big employers like Goldman Sachs are putting down roots here. DFW was recently ranked the No. 1 market for real estate investment in 2025 by ULI and PwC. These aren’t minor signals. They point to a region with staying power. It’s not hyperbole to state that DFW is now North America’s capital of commercial real estate.
We’ve been through enough cycles to know: when everyone else is waiting, it’s usually time to act.
You can also find the full article on D CEO, linked here.
