Episode 76: The Capital Freeze: What's Really Happening in Texas Real Estate

In this episode of the Texas Land Guys Podcast, the hosts have a full house. Tom and Trey join from Dallas, while Tim and David call in from Houston. They kick things off by celebrating Trey's recent promotion to principal at DMRE and looking back on the early days of the Dallas office.
The conversation dives into the challenges facing Texas multifamily development. Rents are softening even as new supply slows, a trend the team ties to inflation and job insecurity among young professionals. In Houston, infill activity is showing slight signs of life, but only in submarkets with real barriers to entry, like the 290 corridor. With land prices reaching $200 to $300 per square foot, high-rise projects remain nearly impossible to pencil out.
Equity has become the industry's biggest obstacle. Developers are spending millions on pre-development costs with no guarantee of closing, and some are walking away from deals entirely. Creative financing, including LIHTC, HUD programs, and pref equity, is no longer optional. In Dallas, capital is flowing toward urban wrap projects, while suburban garden-style deals have slowed. Houston still leans suburban, though infill interest is slowly growing.
Despite Texas leading the nation in population and job growth, tight equity and high construction costs continue to test even the most experienced developers.
Tune in for an inside look at how Texas Land Guys are navigating today's market and finding creative ways to get deals done.

Key Takeaways
Equity is now the biggest obstacle to getting multifamily projects started. Many developers say this is the most difficult fundraising environment of their careers.

Developers are spending $1 million to $2 million on plans and pre-development costs before they can even secure capital partners.

Houston's infill apartment rents remain surprisingly soft despite limited new supply and very few project starts.

Dallas still attracts significant multifamily interest, but developers are increasingly focused on highly urban locations or well-positioned suburban opportunities.

Institutional equity groups have become extremely selective and often require projects to be nearly shovel-ready before making commitments.

Affordable housing, tax credit projects, HUD financing, and public-private partnerships remain some of the most active areas of multifamily development.

Developers are increasingly using preferred equity, co-GP structures, and creative financing solutions to complete projects.

In This Episode:
[00:00] Introduction

[00:47] Trey becomes a principal

[01:22] How the Dallas office started

[02:23] Israel trip and team growth

[06:19] Strong, interesting Houston submarkets

[09:20] High-rise reality check

[12:39] Heights and Washington rent declines

[15:48] Why equity is so tight right now

[19:31] Creative capital stack solutions

[23:32] Institutions hold the leverage

[25:11] Distressed land and market reality

[26:26] What makes an infill deal work

[27:47] Texas growth versus development challenges

[29:22] Affordable housing and financing strategies

[32:40] Houston remains focused on suburban development

[35:13] The Energy Corridor land value correction

[37:04] Why Grand Prairie remains a bright spot

[43:32] Downtown Dallas faces new headwinds

[45:02] Why equity funds pulled back

[45:56] Final thoughts

Resources and Links
Podcast
Texas Land Guys Podcast

https://dmre.com/

Trey McGhin
linkedin.com/in/trey-mcghin-14926960

https://dmre.com/

https://ascentinv.com/

https://100xharvest.org/

David Marshall
linkedin.com/in/david-marshall-91b3a2252

https://dmre.com/

https://ascentinv.com/

https://100xharvest.org/

Tom Dosch
https://www.linkedin.com/in/tom-dosch-37263b3b/

https://dmre.com/

https://ascentinv.com/

https://100xharvest.org/

Tim Dosch
https://www.linkedin.com/in/tim-dosch-67a07899

https://dmre.com/

https://ascentinv.com/

https://100xharvest.org/