•  CBRE Research keeps an ear to the ground for emerging trends in real estate. Imagine our surprise (though not to our teammates in Dallas) when a recent survey based on completed moves and conducted by Mayflower suggested that not Brooklyn, not Portland, but Dallas was the number one destination for millennial migrators (#GoDallas).

•  Millennials are moving to major metropolitan areas, drawn by more than just the twinkling lights in the distance. You’ve heard of location, location, location, and in this MarketFlash we explore the live, work and play factors luring millennials to the Big D.

In the TX/OK region, Dallas has the highest nominal population of millennials, while Austin, a mature millennial market, leads the pack with the highest concentration out of its total resident base. This can only mean more runway room for this age group to grow in Dallas, as the region is expected to top nine million residents in a little over 10 years—and that won’t all come from Gen Y transplants.

Millennial Concentration in TX/OK Region​​

      

         Source: Nielsen Claritas, 2016.


Live: No longer at Chez Parents
With millennials relocating to DFW in heavy volume, developers are following suit by building homes for them. Apartment construction continues to boom in the Metroplex with CBRE Research tracking a record construction pipeline for the market. The most active submarkets for multifamily construction are Dallas CBD, Uptown and Frisco—these submarkets account for nearly 4 out of every 10 apartment units now underway in DFW. These are also the submarkets with some of the highest rents—Dallas CBD/Uptown averages $1.75 per sq. ft. per month, and Frisco rents around $1.32 per sq. ft. In terms of rental growth, Dallas CBD/Uptown saw its asking rates shoot up 5.2% year-over-year, while Frisco’s leapt an astonishing 10.0% year-over-year through the second quarter of ‘16. Despite the rent hikes, renters continue moving in. Dallas CBD/Uptown and Frisco combined absorbed about 21 apartment units every single day during the second quarter alone.

Work: Building a nest egg
Job creation is a significant driver behind Dallas’ apartment boom and there have been many well-publicized corporate relocations and announcements inbound to Dallas in this current cycle alone. Jobs are a primary pull factor for millennials (first place goes to pursuing relationships, according to the Mayflower study—that’s just Dallas being Texas-friendly), and DFW added 120,800 jobs year-over-year through May 2016, the third-highest amount of job growth in the nation behind NYC and LA. Austin, another Texas millennial destination, had a higher growth rate of 3.7% compared to Dallas/Fort Worth’s 3.6% year-over-year employment growth rate. But still, Dallas’ job growth rate is over twice the national rate of 1.7%.

Play: Shopping, Sipping, Snapping
The other major pull factor for millennials is play. No, that doesn’t mean finding a Bulbasaur on Pokémon Go; instead, play means venturing out and rousing the economy at food and beverage spots. Dallas boasts more restaurants per capital than any other city in the nation, with eatery hotspots in Uptown-Downtown, Trinity Groves, Lower Greenville, Bishop Arts and The Design District all creating quite the Instagram food pic portfolio. Millennials are drawn to active areas where they can seek out community connections while finding social snap-worthy food. According to the study commissioned by Mayflower on millennial moving trends, 56% of respondents said that good restaurants are a must have. Brooklyn or Portland: are you getting this IM? [That’s ‘instant message’ for all our non-millennial readers.]
 

Where the jobs are: DFW leads region in employment growth​

    
Source: Moody’s Analytics, May 2016.​




Robert Kramp 
Director of Research and Analysis - Texas-Oklahoma-Arkansas Region
T 713 577 1715
robert.kramp@cbre.com

 
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