Apartment Growth Booms in The Woodlands

In the last two years, 3,500 new apartments have been built in The Woodlands area. And 2,000 of those have been added just in the last year.

“There’s been a lot of activity ever since the Exxon announcement,” said Bruce McClenny, president of Apartment Data Services in Houston, which analyzes apartment trends throughout the region. “There’s a lot of interest from developers trying to get into that area.”

Exxon Mobil Corp. is building a corporate campus on 385 acres west of Interstate 45 and south of The Woodlands where 10,000 workers will occupy the 20 buildings that make up the campus.

Six new communities have been built in the last year in The Woodlands and Spring areas, totaling 2,115 units. That brings the total number of apartment units in the regions to 16,500, McClenny said.

“The developments in general are a little ahead of the people coming, just a little,” McClenny said. “It’s hard to time it right. The good news is you know a lot more people are coming to the area and will continue to come.”

The apartment occupancy rate on average is 83 percent, he said. The new communities bring the percentage down since those units are still filling up with new tenants. Taking out the six new apartment communities in the region, the occupancy rate is closer to 90 percent, he said.

As the population and business growth continues to skyrocket, The Woodlands is working to keep up with the growth by expanding housing options.

To help meet that demand, The Woodlands Development Co. just completed a high-end, eight-story, 400-unit apartment complex on Lake Woodlands. One Lake’s Edge, which is part of Hughes Landing, the new 66-acre mixed-use development.

The developer is also actively leasing at its new 314-unit apartment community in The Woodlands Waterway Square District, The Millennium Six Pines.

In addition, the Howard Hughes Corp., parent of The Woodlands Development Co., is investigating a possible new 20-story high-rise condominium development in the Waterway District, said Paul Layne, executive vice president of master planned communities for The Howard Hughes Corp.

The trend in multi-family developments is communities within walking distance to recreation, shopping, restaurants and workplaces, Layne said.

“The Grand Parkway is punching through and there’s been announcement after announcement of all sorts of things going on there businesses-wise,” McClenny said. “Those developers in that area have to feel good. It won’t be a problem to fill the units.”

Rental rates have been flat in The Woodlands. The average price for a 1-bedroom, newer, upscale Class-A apartment is now $1,148, compared with $1,135 a year ago.

For Class B apartments, which have been built in the last 20 years and have a more dated interior, the average rent is $900. The average rent is $700 for Class C, which are properties built in the last 30 years.

“For the last two to three years, rental rates have risen in Houston, but what we’re seeing in The Woodlands is it’s pretty much been flat for almost a year now,” McClenny said.

And there are more apartments under construction in the region.

“For The Woodlands area, there are three properties presently under construction that will start leasing by the end of the year,” he said. “That will add 700 units. And we’re starting to see Conroe pick up as well.”

And, he said, there are five additional apartment communities proposed for The Woodlands region, which would add 1,500 units.

But the downturn in the oil business has slowed growth a bit, so it’s uncertain when those communities will be built, he said.

“Because of the oil price and things in Houston, the air is out of the bubble and slowed people with the money down,” McClenny said. “Things have been going well, but there’s a lot of uncertainty right now around all construction and development in the Houston area because of that. That’s put a different spin on the way we were looking at things just six months ago.”

By the numbers:

Number of apartment units in The Woodlands and Spring region: 16,500

Number of units added in the last two years: 3,500

Number of units added in the last year: 2,000

Average occupancy rate in The Woodlands area: 83 percent

Average rent price for a 1-bedroom, newer, upscale Class-A apartment : $1,148, compared with $1,135 a year ago

Average rent for Class B apartments, which have been built in the last 20 years and have a more dated interior: $900

Average rent for Class C, which are properties built in the last 30 years: $700