The Dallas-Fort Worth (DFW) multi-family market faces significant headwinds in early 2025, particularly for Class B and C properties. These apartments face rising vacancies, softening rents, and increased leasing concessions. With net operating income (NOI) always at the forefront, DFW multi-family property owners and investors must explore every avenue to maintain profitability while navigating a challenging economic landscape.
Below is essential insight into the current market and how it’ll affect your property taxes.
General Market Overview
The Dallas-Fort Worth multifamily market is moving toward rebalancing in 2025, following a surge in supply in 2024, which saw developers add a record-breaking 38,000 units. However, the influx of new inventory has kept vacancy rates high, challenging landlords to maintain stable occupancy levels.
Across all multi-family segments in DFW, vacancy rates rose 90 basis points year-over-year to 11.4%, driven by net absorption of 28,000 units falling short of deliveries.
Class B properties, categorized as CoStar’s 3-star segment, face even greater pressure. Vacancy rates for these mid-tier properties stand at 11.6% — nearly double the pre-pandemic average of 6%.
This persistent oversupply and shifting renter demand are squeezing landlords who’ve seen vacancy rates consistently rise since Q4 2021.
Declining Rents and Occupancy Challenges
The soft rental market continues to impact landlords, with daily asking rent per square foot on a downward trajectory.
Rents for mid-priced Class B properties have fallen 1.2% in the past year — the first time since the end of the Great Financial Crisis in 2008.
This reversal, the first in over a decade, signals weakened pricing power for property owners who previously relied on steady rent increases to support their bottom line.
Additionally, occupancy rates are also under strain. The overall occupancy rate for Class B and C apartments is 88.91%, reflecting a 9-basis-point drop from the previous year.
Concessions Rise as Competition Heats Up
With mounting pressure to fill units, many Class B and C property owners offer substantial rent concessions to attract tenants.
The percentage of properties offering concessions has risen above 50%, the highest share since 2020. According to market participants, many offer six to eight weeks of free rent to secure leases.
While these aggressive incentives are necessary to maintain occupancy, they further erode revenue streams and exacerbate financial pressures on property owners.
The Property Tax Solution: Protest to Increase NOI
With rental revenue under pressure and expenses remaining high, reducing property tax liability is one of the most effective ways for Class B and C property owners to increase, or at the minimum, protect NOI.
With Class B and C properties being impacted by increased vacancies, they’ll likely receive reduced assessed valuations from their respective counties for the 2025 tax year.
Ownwell specializes in helping property owners protest their property taxes. Our commercial property tax consultants and software ensure valuations align with actual market conditions.
In DFW’s multi-family market — where every dollar counts — successfully lowering property tax assessments can provide much-needed relief.
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Reach out today to see how much you could save!
