SAAA May 2020 Special Edition Residence Magazine MAY_2020_DIGITAL_Magazine | Page 16

MARKET UPDATE
Greater San Antonio Q1 2020 Review
by Jordan Brooks
Market Analyst | ALN Apartment Data, Inc.
W
ith the first quarter in the rearview mirror it’s
time to look back and see how the multi-
family industry in San Antonio performed
to open 2020. The headline event in the in-
dustry and beyond was, of course, COVID-19 and its
far-reaching impact. At the time of this writing in early
April, data is still being collected on the effects being
seen at the property level in terms of rent payments
being made, special arrangements being offered to
residents that have been affected either medically or
economically and the like. The second quarter is when
these issues will come into sharper focus.
All numbers below will refer to conventional properties
at just under 92% after a 0.5% retraction.
Average Effective Rent and Concessions
with at least 50 units. Average effective rent rose 0.5% from January through
Net Absorption and Average Occupancy month. This gain falls well short of the nearly 2% gain
With just over 2,000 new units, more new supply was from the 0.3% appreciation from the opening quarter
delivered in the San Antonio market to open 2020 than
in the first quarter of 2019 or 2018. For the third straight
year net absorption in the quarter failed to match the
new units. About 340 previously unoccupied units were
leased in the period, significantly lower than either of
the two previous first quarters. The lackluster result is
due to a net loss of just over 550 rented units in Janu-
ary. It is only thanks to strong absorption in March that
there was a positive net change in rented units for the
March, bringing the average per unit to $1,016 per
in Q1 2019, though it does represent an improvement
of 2018. As with net absorption, it was the compara-
bly solid March result that prevented rent growth from
being negative for the quarter. Nationally, average ef-
fective rent gained 1% in the period.
More properties were offering a rent discount at the
end of March this year than at the end of March in
2019 or 2018, but the increase in availability came in
the latter part of 2019 rather than in the first quarter
quarter. of 2020. 38% of properties were offering a lease con-
The relatively high volume of deliveries combined remained essentially flat since the start of the year. The
with tepid absorption left average occupancy for the
Greater San Antonio area down 1% in the quarter to
finish March at 89%. For the last three years, average
occupancy has hovered in a tight range between
89% and 90% from January to March so current occu-
pancy is within the normal bounds despite the loss. For
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context, national average occupancy ended March
MAY 2020 SPECIAL EDITION | www.saaaonline.org
cession by the end of Q4 2019 and that figure has
average value of the discount, calculated from only
those properties offering one, declined by a little more
than 3% to finish at about 5.5%. Stated another way,
the average concession was approximately three
weeks off a 12-month lease.