Real Estate Rumblings
Houston's the Super Bowl of apartment markets: Developers build for sky-high rents
ZOM Texas, a Dallas-based apartment developer, is diving into Houston’s Tanglewood area with a 431-unit apartment project.
The apartment project, called The Hudson, will be built on a 5.3 acre site located on Fountainview at San Felipe, near a planned H-E-B-anchored shopping center.
“ZOM continues to pursue multifamily development opportunities in Texas, with a particular focus on the Houston market, based on compelling long term trends,” says David Kubin, senior vice president for ZOM Texas. “With Houston currently ranking No. 2 in the U.S. job market, and the anticipated robust job growth over the next five years, we niche into this market with a carefully researched, unique product and mix.”
“It’s like winning the Super Bowl two years in a row."
The Hudson will be a four- and five-story apartment complex wrapped around a seven-level parking garage.
A number of apartment developers from other parts of the nation have been constructing new apartments and scouting around Houston, searching for places to build more, says Stacy Hunt of the Greystar firm.
“Houston is the best place in the country to be right now,’ Hunt said at the annual Houston Apartment Association State of the Industry Breakfast.
Rents for Houston apartments have gone up significantly, says Bruce McClenny, president of Apartment Data Services. For the best “Class A” apartments rents went up an average of eight percent in 2012 and six percent in 2013, he says, a phenomenal gain.
“It’s like winning the Super Bowl two years in a row,” McClenny says, noting that about 15,000 new units were built in Houston in 2013.
People are willing to pay more rent in order to live in a desired location. “People are making the choice not to commute,” said apartment expert Ryan Epstein of CBRE Group. “They are willing to pay an extra $300 to $400 to avoid the commute.”
In the close-in areas, some high-rise apartment towers are being constructed. Others, like ZOM Texas are building mid-rise “wrap” style construction, meaning the apartment living buildings surround a central parking garage.
ZOM has previously developed seven projects in Texas. The Hudson is ZOM’s third project in Houston.
Stanford Construction will serve as general contractor of The Hudson. Initial leasing will begin in 2015.
