SAN ANTONIO – If you feel like every time you look around San Antonio there is another apartment complex springing up, well, you are not alone.
Since March 2020, the Alamo City has approved building permits for more than 50 new unique apartment complexes with fluctuating rents.
According to Zillow, the median rent for San Antonio is $1,700 a month, and technically, that is a small decrease year over year.
For some families, the local rent prices still beat the idea of buying a home, with a more than 7% mortgage rate.
Just this last week, Embrey Partners opened up a new apartment complex called 7600 Broadway.
“During the pandemic, a lot of things froze up, slowed down,” John Kirk, EVP of development for Embrey Partners said. “Then, it just completely just spiked the demand.”
From drought to downpours, the pandemic may go down as a historically unique case study for housing. The effects are still being felt.
“We saw a huge influx and demand of absorption in the rental market. And that really lasted for some time,” Kirk said.
Kirk, who has properties around the country, said San Antonio is a unique market. Of the areas he covers, the new luxury complex opened last week and is already 50% occupied.
“San Antonio is just kind of this minor gateway market from South Texas, from Mexico,” Kirk said. “You have a lot of commerce that’s happening. And part of our industry is job creation, jobs. And now it’s been pretty robust. San Antonio has always been a very steady market that doesn’t have much highs, doesn’t have much lows,” Kirk said.
And as you look around, one can’t help but think there are more apartments popping up than people to fill them. But that’s just not the case.
“Supply has been high, but it has been keeping up with the demand that’s out there,” Kirk said.
In terms of what comes next, well, it’s getting tougher to build.
“It’s the interest rate environment and our ability to finance these projects,” Kirk said. “And working with construction lenders, it is slowing down. It is tough. It is becoming tougher.”
The slowdown in building is starting.
“Actual starting projects starts are down 70-75% year over year,” Kirk said. “And so you’re seeing a huge fall off, of sorts. So that means supply is coming down.”
7600 Broadway is a mixed-use complex with amenities for businesses that take up the office space.
“I know there’s a lot of negative news on office space that’s out there, but it’s really focused on where is it located, is it walkable and what amenities, does it, you know, have to offer and from a technology and is a sophisticated most of the office and the negativity they see on the news,” Kirk said. “It’s more for those office buildings that are dilapidated. They’re old, they have not been up to date. And so you’re starting to see that in the marketplace. Flight to quality.”
The flight to quality is also evident in the apartments and the amenities bringing families in and avoiding the high mortgage rates. As for growth in the community, well that does seem not to be slowing, just moving.
“More of the growth that we’re seeing in San Antonio is either far West Side, Northwest Side or New Braunfels area,” Kirk said. “The I-35 corridor is where you’re seeing the growth. It’s more on the outer ring of San Antonio.”