San Antonio Multifamily Market Maintains Healthy Supply-Demand Balance

by Taylor Williams

By Sean Sorrell, senior managing director, JLL

Last year, San Antonio’s multifamily  sector was one of the only markets nationally in which the 2020 absorption exceeded that of previous years.

Moreover, the city’s development pipeline was already contracting after 2019, so additional supply reductions in 2020 and 2021 due to COVID-19 should result in rebounding occupancy across the metro. The market is maintaining balance in terms of supply and demand and is poised to elevate its national prominence.

The San Antonio multifamily market ‘s overall inventory is approaching 185,000 units, having grown by roughly 8 percent over the last two years. Ongoing supply growth has marginally outpaced demand, but even in the face of COVID-19, the overall market is approximately 92 percent occupied.

Sean Sorrell, JLL

Sean Sorrell, JLL

JLL’s research shows that nationally, more than 6 percent of apartment renters have vacated their units since April 2020, either moving back in within parents or “coupling up” with roommates. San Antonio experienced very little of this effect, with an occupancy loss of less than 1 percent due to this temporary phenomenon.

These displaced renters are likely to re-enter the apartment market in the near term, and, with ongoing in-migration, we anticipate the San Antonio market should rebound to 94 percent metro occupancy by year-end 2021.

One of San Antonio’s ongoing advantages involves its infrastructure planning. While many successful cities address the challenges of additional traffic in the midst of their growth, San Antonio has done an exemplary job planning for its growth and expansion in advance.

For example, commuting from The Rim to the CBD can be easily accomplished within 20 minutes during most times of the day. This ease of commute ensures a competitive landscape wherein prospective tenants are given opportunities to consider many different locales and still access most of the metro in less than 30 minutes.

To address rental community needs, about 6,100 units are due for completion in 2021, and another 14,000 or so units are currently being renovated.

Additionally, several suburban markets including Stone Oak, Sonterra and The Rim are experiencing high-density development, thus minimizing the need for larger tracts of land. This trend has caused developers to expand their garden-style projects in other submarkets such as Live Oak and New Braunfels.

While the development pipeline has declined, absorption rates are projected to increase with the ongoing strength of employment in the city. San Antonio has a military presence of over 80,000 active duty and reserve troop and 60,000 healthcare workers at South Texas Medical Center and other facilities.

Private employers H-E-B (~20,000), USAA Insurance (~18,300) and numerous cybersecurity firms totaling approximately 25,000 employees also represent significant employment bases. Furthermore, the local tech market has expanded  significantly with Rackspace, Accenture, Oracle and many others projected to add a combined 50,000 or so new jobs to the employment base in 2021.

The strong employment environment is complemented by a bustling tourism industry. Led by the Alamo and the RiverWalk, the tourism sector features other popular destinations like the JW Marriott Resort, the Hyatt Hill Country Resort, Six Flags Fiesta Texas, SeaWorld and the San Antonio Zoo.

Multifamily investment activity has been rampant, with many notable deals in the urban corridors as well as in the suburbs. JLL, along with our peers, has been fortunate to close transactions amid the challenges that COVID-19 has brought, but the aforementioned resilience in this market has been a staunch advantage.


Pictured is a rendering of The Moderno, a 280-unit multifamily project by locally based developer Koontz Corp. in New Braunfels. Limited new development has helped keep the greater San Antonio multifamily market balanced throughout the pandemic.

Deals have continued to close over the past 12 months as buyers, sellers and brokers have found new workarounds and modes of operating. Consequently, we expect 2021 to also be a strong year in terms of multifamily investment sales volume.

Among our largest transactions of 2020 was the sale of The Mansion and Estates at Briggs Ranch, a deal for 792 units in the West San Antonio submarket that closed in April. The new ownership plans to conduct minor upgrades and deliver modern accents. Other notable transactions in 2020 included Tradehouse at Bulverde and Lenox Stone Oak. In each case, pricing was at or above pre-COVID-19 valuation levels, illustrating the overall strength of the market.

In conclusion, the San Antonio multifamily industry is projected to have one of its best years yet in 2021, thanks to demand exceeding supply courtesy of a disciplined development pipeline. Transactions will continue to close, with ample capital available for pursuit of qualified investments. Fundamentals should only strengthen throughout the year, and confidence in the market will be rewarded accordingly.

— This article originally appeared in the March issue of Texas Real Estate Business magazine. 

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