(Candy’s Dirt) – There’s no doubt that high interest rates are impacting new construction starts, but Dallas-based luxury multifamily developer StreetLights Residential isn’t letting the industry’s financing woes slow them down. Two local projects are underway in Dallas: The Galatyn near Katy Trail and The Oliver at The Central.
Additionally, StreetLights Residential has multiple projects under construction in six other states.
StreetLights president Rob de Bruin told CandysDirt.com this week that his company is not immune from the struggle with new construction starts. The developer’s most recent start was in mid-2023, de Bruin said.
“Capital markets aren’t opening up yet,” he said. “We’ve got six jobs throughout the country that are pretty much permitted and ready to go. We’re waiting on either our partner or capital to turn loose.”
Rob de Bruin, President of StreetLights
In addition to the two developments in Dallas, StreetLights has projects underway in Arizona, California, Florida, Georgia, North Carolina, and Tennessee.
“We still believe the fundamentals in demand are strong,” de Bruin said. “The main issue is just capital.”
The Galatyn
The Galatyn sits in the Upper McKinney District at 3030 Monticello Ave., about a block from the Katy Trail and its sister project, The McKenzie.
Considered a “platinum project” by the developer, The Galatyn’s 56 units feature spacious floor plans averaging 2,700 square feet with entry foyers and attached powder bathrooms. Private service kitchens have a second refrigerator, sink, and dishwasher. The penthouse units are over 4,000 square feet.
“We really focus on the interiors of our units,” de Bruin said. “We’re big believers that people will pay for what they can touch and feel so we want it to feel like a home and not just an apartment. We want to focus on the amount of cabinetry we put in the kitchens, the usefulness, and how people live. We don’t throw together a bathroom and a bedroom and call it a day.”
The Galatyn is set to open 2025.
The Oliver
The Oliver is the 351-unit first phase of a massive new mixed-use development called “The Central,” near Downtown Dallas at 2750 N. Haskell Ave.
The 19-story tower is “on the quieter side” of U.S. Highway 75 and faces The Central’s park, which features a restaurant, pool, and amenity spaces on the first level.
StreetLIghts offers in-house design, architecture, and construction, which sets them apart from other developers and may have contributed to the recent honor of being named the National Association of Home Builders’ Multifamily Developer of the Year.
The Oliver has studio, one-bedroom, and two-bedroom units ranging in size from 588 square feet to 1,830 square feet.
StreetLights wants to create a walkable atmosphere and “focus on the street” around its developments, de Bruin said.
The original site plan for The Oliver at The Central called for a lot of office and retail but that may change due to market constraints, de Bruin said.
“As you know, the office market has completely tanked,” he said. “We’re a little concerned about what the total development will look like. Hopefully, there will be more opportunities for multifamily. They had probably four or five office buildings planned that never materialized or there’s a big delay.”
Making the Numbers Work
StreetLights specializes in the higher-end luxury market but also has a “stick product” that is more accessible. De Bruin said he understands why affordable housing developers are demanding incentives in order to produce more units.
“We’ve had issues making the numbers work because the yields dropped to a low point,” he said. “We saw huge price increases in ‘21 and ‘22 when you were probably building for double the costs that you were five or six years ago.”
They’ve done well with platinum products like The Galatyn.
“You’re at a price point where people rent there not out of necessity but because they want to.”
Rob de Bruin
“Price is less of an issue for them, whereas when you’re dealing with rental out of necessity, everyone is a lot more price-sensitive.”
Will interest rates drop, we asked. That’s the million-dollar question.
“I’m a little skeptical,” de Bruin said. “I thought we were going to see a rate change this year. At the beginning of the year or even late last year, everyone thought there were going to be five or six cuts. As the year progresses, it looks less and less like there’s going to be a rate cut this year, which delays a lot of projects from starting.”