San Antonio multifamily leaps, bounds into 2016San Antonio multifamily leaps, bounds into 2016https://www.recenter.tamu.edu/news/newstalk-texas/?Item=116622016-01-12T06:00:00Z2016-01-12T19:00:00Z

​​SAN ANTONIO - The strides San Antonio's apartment market made last year are expected to get even longer in 2016, with continued job growth and attractive demographics bolstering new residential development, increased rental rates, investor interest and leasing activity.​

According to Institutional Property Advisor's latest apartment research report, the city's diverse economy and employment base will continue to attract young professionals that favor renting over buying a home, which will continue to support San Antonio's fast-growing multifamily stock.

The younger tenant base will also spur new developments in walkable, dense environments that focus just as much on the surrounding lifestyle amenities as the in-unit ones, such as biking routes, food trucks, shorter commutes and farmers' markets.

The report states that companies will add 30,500 jobs this year, which will add even more pressure to the demand for apartments in the metro.

Compounded with the drop in multifamily permitting and construction starts — down 76 percent and 70 percent, respectively, compared to year-end 2014 as developers begin to scale back new projects — the citywide vacancy rate will likely go down even further.

Since 2000, vacancy at apartments has tightened below 5 percent, with the number of those properties offering concessions dropping to 3 percent from 14 percent just a year ago.

Rent growth in North San Antonio will continue to lead the citywide average, especially in pockets such as the Northwestern submarket and Stone Oak. However, that focus may shift to San Antonio's city center once the Cellars at Pearl development comes online, a milestone the area is expecting to hit later this year.

Rents in the luxury development will be the highest in the city, and if successful, will push other developers to follow suit with similarly upscale, high-rise projects.

With four of San Antonio's submarkets already topping $1,000 per month in rents, watch for the citywide average — now a bit higher than $900 a month — to come closer to flirting with that four-digit figure.

Last year's growth set San Antonio's apartment market up for a successful 2016, so now the question that's left is how much higher the market will climb.
San Antonio Business Journal
San Antonio-New Braunfels

​​Also see Marcus & Millichap's San Antonio 4Q 2015 report​.​​​

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