- A number of projects received tax credits via a city-sponsored initiative.
- Only one of the 18 downtown projects will feature for-sale units.
- Multifamily demand in Houston is expected to be outpaced by supply in the coming quarters.
Multifamily deliveries and project starts are expected to taper off in Houston; however, the city’s downtown should see the completion of nearly 5,200 units in the next 24 months. Eighteen projects that are currently underway or planned.
Currently 10 multifamily projects, which total more than 2,700 units, are underway in downtown. All of these developments will be delivered between early 2016 and the second quarter of 2017.
Most of these projects are being built by developers that have recently constructed other multifamily developments in Houston. The majority of these developers are Houston-based firms or national developers with a local office. Project types range from high rise and mid-rise to podium/wrap developments.
An additional eight downtown projects are slated for groundbreaking in the coming months, which indicates developers are confident in Houston’s ability to absorb units in 2017, when most of these projects will reach completion.
The eight projects will account for nearly 2,500 units. One development being built by Randall Davis will be a 20-story, 100-unit condo tower.
According to Houston-based real estate firm Transwestern, overall demand for apartments in Houston should remain steady; however, it will be outpaced by supply over the next several quarters.
Based on occupancy levels, three of Houston’s downtown submarkets should be able to absorb a number of upcoming unit deliveries. At the end of the third quarter the Montrose/Museum District had an average occupancy of 92.5 percent, according to a Transwestern report. The Medical Center/Bellaire and Inner Loop East markets had average occupancies of 92 percent and 93.6 percent, respectively.
The Inner Loop West/Greenway Plaza (85.4 percent occupancy) and Heights (79.9 percent occupancy) submarkets should have a more difficult time absorbing units in the next two years.