With a large number of apartments under construction and on the market, new Dallas developments are competing to bring in residents.
That’s leading many apartment complexes to give concessions, or free rent, to potential lessees. Nationally, the apartment market has added roughly 1 million new units since 2015, and concessions are becoming more popular at lease-up properties looking to establish a resident base.
Dallas ranked fourth in a study by Richardson-based RealPage (Nasdaq: RP) for concessions among the 15 U.S. markets that are most active with multifamily building. Since 2015, the city has added 57,863 new units.
That’s led apartment complexes in the area to offer an average 7.9 percent in concessions, or roughly a month’s worth of free rent.
Dallas tied with fellow Texas city Austin, which ranked third, for amount of rent concessions. Atlanta took first with 9.1 percent concessions, or more than one month of free rent, and Houston edged above its sister cities at 8.6 percent concessions, to take second.
High levels of rent concessions in Dallas are due to concentrations of new apartment building in the city’s core and its northern suburbs. New properties in those areas are jockeying to bring in residents, offering freebies to look like the most attractive option.
“Since you have so much construction in the Dallas market, you get some meaningful giveaways to meet the initial resident base,” said Greg Willet, RealPage’s chief economist. “The size of the discounting tends to get bigger depending on how concentrated the building is in any given metro. With so much construction in Dallas’ core and suburban markets, that can shape the markets.”
Click through the slideshow to see RealPage’s full list of all 15 markets with the largest rent concessions.
Largest North Texas Homebuilders
Ranked by # of Local New Home Closings in 2016
Rank Business Name # of Local New Home Closings in 2016 1 D.R. Horton Inc. 4,320 2 Highland Homes- Dallas LLC 1,456 3 Lennar Corp. 1,321 View This List