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Rent wars
More than 3K new apartments good news for tenants
By Jan Bellamy
Staff writer
“There is a huge amount of inventory coming in the Frisco market,” said Greg Willett, vice president of research with the Carrollton-based apartment analyst M/PF YieldStar Inc. “The inventory growth is phenomenal.”
Willett projects it will take three years before area population growth and changes absorb the new apartments. This, he said, will favor renters as apartment developers scrabble to draw and keep tenants.
“They will get creative,” Willett said. “The question will be: How many people can you get in the door?”
But others don’t necessary agree competition will be all that fierce. After all, not everyone is looking for the same apartment in the same place.
“There are many different products out there,” said Jeff Lindsey, senior vice president with Westwood Companies. Westwood is leasing phase one of 655 units at Cool Springs at Frisco Bridges, 3198 Parkwood Blvd., east of Central Park.
“People who want to live in an urban setting are willing to pay a premium,” Lindsey said, “while the suburban renter is looking for a different value and to pay less.”
Cool Springs is going up across from 273 new units at Post Sierra at Frisco Bridges, located at the southwest corner of Parkwood Boulevard and Warren Parkway. That puts more than 900 new apartments at the same intersection.
Both are not the typical “garden-style apartment,” but are defined as “mixed use” developments, the focus encouraged by Frisco and Planning Director John Lettelleir.
“Mixed use combines residential with commercial and retail,” Lettelleir said. “It encourages walking, a healthy factor, and a sense of place, like Frisco Square.”
Under construction in 2009 are 1,622 mixed use residential units in four locations and 1,488 garden-style apartment communities at five properties. They started as concepts two to three years ago, in most cases, when demand and the population growth rate were both high.
And almost every one of these developments today is offering a discount of more or less than $200 per month off their “market rents.”
But Lindsey said that’s not because of over supply driving down rents.
“We’re offering our first tenants at Cool Springs a break,” Lindsey said. “After all, they are going to put up with construction for some time.”
The complex could see leasing agents opening 20 to 30 units every couple weeks, depending on construction completion schedules, Lindsey said. And Cool Springs is just one of nine multifamily developments upping that number of new units every few weeks over next year or so.
Existing apartment communities are looking not only at the new competition but how to make existing units look better to apartment shoppers.
“We are doing some heavy marketing,” said Kristen Bowser, director of communications for The Connor Group, an Ohio company that owns and operates nine properties in the Dallas-Fort Worth market, including The Residences at Starwood, an 11-year-old property at 6595 Lebanon Road.
“Our focus is customer satisfaction, to draw and keep residents,” said Bowser, sensitive to the draw of 270 new units going up next door at La Valencia, 6805 Lebanon Road. Starwood is scrambling to hold its own and Bowser has a plan.
“Every market has its standard amenities, like fitness centers and pools,” Bowser continued. “Given the glamour and glitz of Dallas area locations, we want to go the extra mile with value added attractions like a free personal trainer or masseuse. Our residents deserve it.”
Yieldstar’s analysts boil it down to supply and demand.
“We projected an apartment demand increase of 1,600 for Frisco and West Plano, and Frisco’s 3,100 new units will get the lion’s share of that,” Willett said. “You will see aggressive marketing of product priced to move. And for both new and existing, let’s just say there will be a lot of ‘brain strain’ to find some feature to entice the customer.”
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