Five multifamily projects were completed in the last 12 months in Cypress, according to a report from ApartmentData.com. One project—the Winward At Telge Crossing—is under construction, and one more is proposed in the Bridgeland area.
The five recently opened projects brought a combined 1,293 units to the market. Lakeside Row, a Bridgeland Property that opened in October, has roughly 56% of its 312 units filled as of June, according to ApartmentData.com. Cue Luxury Apartments on Fry Road, which opened in December, has about 30% of its 251 units occupied.
The occupancy rate for apartments across an aggregate of northwest Houston submarkets in Tomball, Cy-Fair and Spring dropped from a little over 90% in March to 89.3% in May, according to ApartmentData.com. Bruce McClenny, the president of ApartmentData.com, said that drop has less to do with the coronavirus and more to do with the roughly 2,000 new apartments added to those submarkets over the past year.
“Construction was really what caused the drop in occupancy,” he said.
Similarly, the northwest Houston area had a positive absorption rate of 513 units between April 20 and May 20, meaning 513 more units were occupied than were left over that time frame. By contrast, the Greater Houston area had a negative absorption rate of 230 units in the month of May. The positive absorption rate in northwest Houston can likely be tied to the influx of new units, which people could have preleased before the coronavirus hit the market, McClenny said.
The effects of the coronavirus will be felt more by newer complexes than existing ones, McClenny said.
Units are still being leased at Starwood Farms, a townhome project slated to open Aug. 1 on Telge Road in Cypress. However, the pace is not at levels developers were hoping for, said Steve Olson, the director of sales with Fourplex Investment Group, which is overseeing the project.
“If you take a snapshot of today, people are a little more freaked out, and they are trying to stay put if they can,” Olson said. “The demand for new, clean, affordable units is there, but people are renewing existing leases more regularly. They are just a little more reluctant to move.”
Fourplex is moving forward with its plans for 244 units across three-story fourplexes. He said he expects the drop in demand to subside as the economy recovers.
However, Ivy Point Cypress—an independent-living community for age 55 and older on Mueschke Road—is bucking the trend, said Iggy Grillo with Pinpoint Commercial, which developed the project.
“Although we expected a slowdown in demand, we have been getting multiple couples and individuals coming in to lease units every week,” he said.