AN UPDATE ON THE CONSTRUCTION PIPELINE
By Jordan Brooks , Senior Market Analyst , ALN Apartment Data
J U L Y E D I T I O N
As has been the case with most markets around the country this year , multifamily performance so far in 2024 has included the continuation of some negative trends but has have also been some bright spots . Apartment demand this year through May has not been especially robust , but net absorption has continued to slowly and steadily improve from the trough of 2022 . Average occupancy has continued its slide , and in fact , the 244-basis point decline so far this year represented an exacerbation of the trend which has been in place since 2022 .
JORDAN BROOKS
The issue has been , and continues to be , new supply . The modest improvement in net absorption seen across the market has not been enough to close the gap with new supply . Given the major role of new construction in industry performance , it is worth a check-in on the construction pipeline .
All numbers will refer to conventional properties of at least 50 units .
Recently Delivered Units
About 6,500 new units have been delivered across Greater San Antonio in the first five months of the year . This massive amount of new supply to this point in the calendar was unprecedented in recent years . This year ’ s new units total for the period was larger than for the last three years combined in the same portion of the calendar . The 6,500 new units also more than tripled the five-year average of about 1,950 new units delivered through May .
The Greater New Braunfels area led the way with nearly 1,000 new units delivered so far this year . The Thousand Oaks – North of Starcrest region added just more than 800 units , and the Downtown – Riverwalk submarket added slightly more than 600 new units . In all , fourteen of twenty-five ALN submarkets for the Greater San Antonio market have seen at least one new property delivered this year through May .
This year ’ s new units total for the period was larger than for the last three years combined in the same portion of the calendar .
Of course , the full story with new units already delivered is not just the units that have been added this year . There are plenty of properties still in a lease-up phase that were introduced to the market prior to 2024 . In total , the market ended May with almost 16,000 units in some phase of lease -up . These units include projects that are still completing construction but have already begun leasing , as well as those that have completed construction and are in lease-up . For context , average annual net absorption over the last ten years has been approximately 4,150 units .
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