Jun 11, 2012 at 10:18 PM
Amarillo’s housing market has spun into a fresh apartment cycle.
Case Development LLC of Tulsa, Okla., is launching construction of The Park at Coulter Apartments, a 262-unit complex at 5040 S. Coulter St., the second upscale property of more than 200 units to be granted building permits by the city of Amarillo in as many months, city Building Official Scott McDonald said.
The city figures The Park at Coulter’s construction value at $24.3 million, using a formula that considers the total cost of raising the 24 buildings, from underground utilities and site development to construction completion and landscaping, McDonald said.
Tigris LLC, a Lubbock developer, began construction of Salt Fork Apartments in April at 9150 S. Coulter St., as part of the planned RedStone residential development. The 210-unit property will include more than 30 buildings with a construction value of about $20 million, according to city permit data.
The economic downturn and associated rough housing and lending markets have given investors opportunity on the rental side, two experts said.
“The rate of home ownership, of course, has fallen,” said Jim Gaines, Texas A&M University Real Estate Center research economist. “And people have got to go somewhere. They’re either going to rent or going to own.”
A stigma once associated with renting also has worn away, said Theron Patrick, a data analyst with ALN Apartment Data, which monitors 22 markets, including Amarillo and Lubbock.
Add in uncertainty about jobs and increased credit requirements for home mortgage loans, and some choose, or are forced by circumstance, to rent, Gaines said.
The pre-downturn economy boomed in the early 2000s, “but multifamily didn’t see a lot of that,” Patrick said. “There’s less competition from housing, and even rental homes, now.”
A nationwide survey of commercial and multifamily mortgage-loan bankers showed a 45 percent increase in loan originations for multifamily properties in the first quarter of 2012, compared with the same quarter of 2011, the Mortgage Bankers Association reported last month. The Washington, D.C.-based association represents the real estate finance industry.
Newer properties are a draw, Gaines said.
“Where (people) are choosing to rent, rather than buy, they’re being a little more picky,” he said. “They want better quality, better space, amenities – more trim work, a little nicer appliances, that kind of thing.”
Monthly asking rents in Amarillo in May averaged $638, an increase of 3.1 percent from May 2011, according to ALN’s market data, which covers an estimated 12,000 units in the city.
Occupancy in Amarillo remained flat, hovering at 91.3 percent, a decrease of less than 1 percent from the year before. About 90 fewer units were leased in May than in May 2011, Patrick said. The mix of apartment properties surveyed by market monitors can vary.
The Park at Coulter will sit on a tract between Lowe’s Home Improvement Warehouse and Continental Parkway, adjacent to The Colonies residential neighborhood. It will contain a mixture of one-and two-bedroom units in buildings two and three stories tall, said Scott Case, vice president of project developer/operator Case & Associates.
The two-story “loft” buildings will feature apartments over garages connected by interior stairways, Case said.
Case & Associates already operates four properties in Amarillo, Newport Apartments at 6100 S.W. 45th Ave., Remington Apartments at 8801 W. Tarter Ave., The Colonies at Hillside at 7550 S. Hillside Road, and Winchester Apartments at 5509 S.W. Ninth Ave.
The company manages properties elsewhere in Texas, Oklahoma, Kansas, Arkansas and Mississippi.
“Amarillo has been a very good market for Case,” Case said. “We are looking at the market surveys weekly, And whenever we see that occupancies are staying above 95 percent, that tells us that the market could handle another 200 or 300 apartment units.”
Salt Fork Apartments is rising on an undeveloped Coulter tract south of Loop 335.
It will contain units with one to three bedrooms and offer a limited number of garages for rent.
Tigris developed the 178-unit Arden Road Apartments built in 2008-09 off Arden Road near Interstate 27 and South Bell Street.