Location, location, location: The relationship between multifamily real estate performance and location within three polycentric urban areas (Texas).

摘要

This study examines the link between property location and multifamily real estate financial performance (value, net operating income, and rent). This research analyzes multifamily properties located within the three largest urban areas within the state of Texas: Dallas-Fort Worth, Houston, and San Antonio. The majority of research involving real estate has placed its attention on owner-occupied, single-family residential properties rather than income-producing commercial real estate such as multifamily properties. This lack of research is due in part to a lack of high quality information on multifamily property, which in turn adds to the risk premium charged by equity investors and mortgage lenders. These additional costs lead to higher rents charged to multifamily residents. However, this study's primary data source is the Multifamily Information Solutions Incorporated's (MISI) AptData™ database, which contains unprecedented multifamily property information, both attribute and financial.; Although American urban areas have evolved in the past 60 years from monocentric to polycentric, real estate researchers attempting to quantify the impacts of location on one or more real estate performance indicators have used location measurements suited more for the outdated monocentric urban model. This study utilizes geographical information systems technology to create a more meaningful and applicable location measurement, free-flow drive time to employment center. Based on the findings, this location measure better explains variance in multifamily property performance than the traditional straight-line distance to Central Business District (CBD), which has little relevance to modern American urban form.; Empirical evidence shows that multifamily property location, based on free-flow drive time to employment center, significantly influences property performance. As drive time increases performance decreases. Moreover, the study shows that straight-line distance to CBD does not significantly impact property performance in the Dallas-Fort Worth, Houston, and San Antonio Urban Areas.