If you regularly drive in and around Houston, you have undoubtedly seen dozens of construction projects. Many of these are apartment buildings and complexes. In fact, nearly 130,000 commercial apartments are currently under construction somewhere in the Lone Star State.
Whether you are a construction executive, commercial real estate investor or property manager, you must keep close tabs on apartment construction. Fortunately, there are no signs the apartment boom in Texas is likely to slow any time soon.
The relocation of large tech firms
Large technology firms, such as Google and Apple, employ thousands of workers and pay high wages. While Silicon Valley and other places in California have housed many tech firms in recent decades, a growing number of tech executives have either moved or announced plans to move business operations to Texas. These include Oracle, Palantir and even Tesla.
A lack of affordable housing options
When firms move into Texas, their personnel need places to live. Once-affordable Houston now ranks fifth in the nation in the number of available affordable homes, according to the National Low Income Housing Coalition. Consequently, demand for rental units remains at an all-time high. As housing prices in the Houston area continue to rise, an increasing number of residents are likely to consider renting apartment space instead of purchasing a home.
Availability of low-cost building materials
While the building supply chain has experienced some interruption in recent months, Houston’s geographic location may make securing low-cost building materials easier than in other parts of the country. Consequently, the metro area is attractive for developers, investors and contractors alike.
Ultimately, even though the last market crash is yet another reminder that booms do not last forever, market forces and other factors are likely to make apartments a good commercial investment for the foreseeable future.