Regardless of Location, Nation’s 10 Busiest Submarkets for Construction Share a Sense of Place
The Nation’s 10 Busiest Submarkets for Construction offered a surprising mix of urban and suburban locales across the U.S. Regardless of their location, they all shared a common characteristic – a sense of place.
Many of the submarkets featured distinct neighborhoods with distinct community identities. The primary commonalities between the submarkets were attractive retail and entertainment centers and strong employment centers to support a growing renter base. We saw a notable uptick in development in areas with some sort of public transportation and a push towards emphasizing walkability and mixed-use development. All submarkets had access to multiple major roadways, providing residents with easy access to major employment centers throughout the surrounding metro.
Also, many submarkets were within driving distance to major universities. However, even those with close proximities to higher education did not experience a surge in student housing. Across all high-growth submarkets, the vast majority of new supply was in market-rate housing, with little to no delivery of student, senior or affordable units.
The near-term outlook for these top 10 submarkets varied somewhat, but most are expected to suffer some supply shock over the next year as record numbers of new units are delivered in and around their borders. However, the majority of the submarkets are predicted to thrive long term, supported by strong demand drivers.
These trends carry on in submarkets that placed outside of the top 10. Let’s take a quick look at the areas that ranked #11 through #20:
11. Memorial, Texas
This submarket gained 760 units between 1st quarter 2012 and 1st quarter 2016 with another 3,652 units under construction at the end of that period. That development will expand the apartment inventory base by 59.2%. Boasting the impressive CityCentre development, this rapidly developing area is drawing attention for its upscale shopping options like Town & Country Village and growing list of top employers. The area is serviced by multiple major roadways, allowing for easy access to all of the expanding metro’s amenities and employment opportunities.
12. Katy, Texas
The Katy submarket, located in the Houston metro, gained 4,080 units between 1st quarter 2012 and 1st quarter 2016 with another 2,241 units under construction at the end of that period. That development will expand the apartment stock by 58.6%. While the submarket includes multiple cities west of Houston, the city of Katy has received the majority of the submarket’s multifamily development. I-10 provides the submarket with access to the Energy Corridor and downtown area. Katy is surrounded by various major employers and is conveniently bordering Houston’s Energy Corridor.
13. Spring/Tomball, Texas
Located north of Houston, the Spring/Tomball submarket gained 3,558 units since 1st quarter 2012 and recorded another 966 units under construction at the end of 1st quarter 2016. That development will expand the multifamily housing base by 57.5%. New apartment construction has been concentrated in the town of Spring, around the new ExxonMobil campus off of I-45.
14. Intown Dallas, Texas
This high-rent submarket in Dallas gained 6,360 units between 1st quarter 2012 and 1st quarter 2016 with another 6,971 units under construction at the end of that period. This led to inventory expansion of 57.23%. Popular neighborhoods within the area include downtown, Uptown, Victory Park, and Deep Ellum – which boast many of the metro’s most popular shopping, dining, entertainment and cultural options. Other key drivers for the area are various large employers and an expanding park system
15. Broomfield, Colorado
Located in the Denver/Boulder metro, this submarket saw a 57.2% jump in apartment inventory. It received 2,860 units since 2012, with 1,439 units still under construction at the end of that period. Broomfield has emerged as a corporate and technology hub, providing ample high-paying jobs to support its growing housing base. Broomfield is also serviced by multiple major roadways and it is situated halfway between Denver and Boulder.
16. North Fort Worth/Keller, Texas
This area saw rapid expansion before the recession, but it slowed after the economic downturn. The recent uptick in multifamily development can be attributed to easy access to downtown Fort Worth through I-35, great school districts and proximity to employment hubs. The North Fort Worth/Keller submarket features the massive AllianceTexas development, where many new jobs are coming. The submarket received 2,367 units since 1st quarter 2012 and had 1,010 units still under construction at the end of 1st quarter 2016. This resulted in a 54.9% inventory growth rate.
17. Downtown Indianapolis, Indiana
Downtown Indianapolis gained 3,001 units since 2012 and had another 1,690 units under construction at the end of 1st quarter 2016. That development will expand the multifamily housing base by 54.8%. This submarket boasts easy access to major roadways, including the intersection of I-65 and I-70 at the heart of the submarket. Strong economic drivers including a solid base of large employers and corporate headquarters and multiple large universities. The submarket is a true work-live-play area and is highly walkable — a huge bonus for residents!
18. Rockwall/Rowlett/Wylie, Texas
This rapidly developing submarket is located in the northeast side of the Dallas metro. The cities of Rowlett, Rockwall and Wylie offer residents more seclusion from the hustle and bustle of urban life, while still being within driving distance to the metro’s various amenities. Most development is occurring along the western portion of the submarket in Rockwall. Check out the Rockwall Economic Development Corporation website to learn more about how Rockwall is coming into its own as an employment center , especially with Technology Park! This submarket gained 633 units between 1st quarter 2012 and 1st quarter 2016 with another 1,328 units under construction at the end of that period. That development will expand the multifamily housing base by 54.2%.
19. Midtown Atlanta, Georgia
Midtown Atlanta gained 3,419 units since 1st quarter 2012 and recorded another 4,953 units under construction at the end of 1st quarter 2016. That development will expand the multifamily inventory by 54.0%. The area boasts several demand drivers, including proximity to major universities like Georgia State University, Emory University and Georgia Institute of Technology. The submarket also has a solid base of entertainment options, including a lively nightlife and bar scene, as well as ample cultural activities with venues such as Fox Theater and the Arts District. The walkable area of Atlanta also features multiple parks and tons of walking and biking trails.
20. Oak Lawn/Park Cities, Texas
This affluent Dallas submarket is located just north of the downtown and Uptown areas. Highly exclusive, rents in the Oak Lawn /Park Cities submarket were 51% higher than the Dallas metro in 1st quarter 2016. Fueling the 53.7% expansion in multifamily inventory are nationally acclaimed school districts, Southern Methodist University, prime shopping, access to the metro’s various employment hubs and a tight-knit community. This area gained 3,051 new multifamily units since 2012, with 3,061 units under construction at the end of 1st quarter 2016.
Missed a previous post in our series? Revisit the top 10 submarkets for apartment construction here:
9. Far Northwest San Antonio, Texas
7. Downtown/Highlands/Lincoln Park, Colorado
6. North San Jose/Milpitas, California
5. Navy Yard/Capitol South, District of Columbia
4. Downtown Houston/Montrose/River Oaks, Texas
