Marcus & Millichap

San Antonio Multifamily Investment Forecast

2020 Outlook

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San Antonio Apartment Performance Gains Momentum As Wave of Supply Abates

Workforce fueling strong lease-up performance. Six consecutive years of at least 5,000 units delivered annually ended in 2019, and this abatement will continue in 2020. No longer facing profound supply headwinds, lease-ups will overshadow deliveries and contract vacancy into the mid-5 percent range after hovering near the high-6 percent area for the majority of this decade. Demand is buoyed by consistent employment growth, primarily within working-class fields. Wholesale and retail trade jobs are being created at a faster rate than the national average, as corporations establish strategic logistical facilities inland from Gulf of Mexico ports and within the NAFTA corridor. Additionally, the inflow of retirees is boosting the need for leisure and healthcare workers. The working-class population segment will remain a tailwind for budget-friendly rentals, holding vacancies in the mid-5 percent range for Class B/C properties, helping maintain the positive growth trajectory of rental costs.

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