Deal Sikes & Associates Multifamily Valuation Report: Houston’s Older Multifamily Projects Show Strength as Upscale Apartment Market Faces Overbuilding

HOUSTON--()--Older multifamily properties in Houston demonstrate the potential for significant price gains in 2016, even though the city’s upper-end apartment market is facing overbuilding, according to Deal Sikes & Associates, a leading Texas-based valuation firm.

“Investors should expect to see strong gains in Houston multifamily valuations for older apartment communities, many of which have high occupancy rates of 95 percent,” said Matthew Deal, principal of Deal Sikes & Associates. “Houston’s older multifamily communities, which are categorized as Class B or Class C properties, have outstanding underlying investment fundamentals. Rents are rising and occupancy rates are strong in Houston’s Class B and C apartment communities.”

“The upscale apartment market is headed for a rough patch,” Deal said. “More than 100 high-end, Class A apartment communities are now under construction in the Greater Houston area. This new supply will force apartment owners to cut rental rates. We expect to see valuations for upscale apartments, including high-rise residential buildings, to be under pressure until the market reaches equilibrium again in two or three years.”

“While Houston’s Class A apartment market is oversupplied, the inventory of affordable Class B and C units is tight,” Deal said. “In fact, many of the new projects built in recent years, were constructed on sites where old apartment buildings were demolished.”

“Many consider Houston to have a shortage of workforce housing options,” said Mark Sikes, principal of Houston-based Deal Sikes & Associates. “Working class families struggle with rising rental rates and we expect to see rents continuing to escalate. Adequate workforce housing is a problem Houston leaders will need to address in the future.”

A leading commercial real estate valuation firm in Texas, Deal Sikes & Associates provides valuation and counseling services for real estate companies, governmental agencies, law firms, real estate investors and corporate clients across the nation. The Houston-based firm provides counseling on a variety of matters including right-of-way acquisition management, economic impact studies, portfolio analysis, environmental contamination analysis and valuation services for financial transactions, estate tax planning and other real estate issues.

Contacts

Deal Sikes & Associates
Matthew Deal or Mark Sikes, 713-662-3500
www.DealSikes.com

Release Summary

Houston’s Class B and C multifamily markets show strength, although the luxury apartment segment faces overbuilding, reports Deal Sikes & Associates.

Contacts

Deal Sikes & Associates
Matthew Deal or Mark Sikes, 713-662-3500
www.DealSikes.com