SAAA May 2020 Special Edition Residence Magazine MAY_2020_DIGITAL_Magazine | Page 17

three years. The result was net average occupancy loss
in the region, though occupancy remains within the 1%
range it has been in for Q1 in the last three years.
Average effective rent growth was significantly lower in
the first three months of this year than in the same period
last year, but still managed to outpace the mark from
2018. Concessions, while more available, actually went
down slightly in average value.
Submarket Highlights
The temptation might be to blame an overall lackluster
The Northwest – Helotes – Grey Forest region added the quarter on effects of COVID-19 being felt by the industry
most new units to start the year, with nearly 700 delivered in March. However, the data does not bear that out. In
units. Less than one-third of the 25 ALN submarkets for fact, it was a comparably strong March that brought the
the Greater San Antonio area had any new construction quarterly numbers up from where they were after a dis-
deliveries in the quarter. mal January and February. There is no doubt that the full
impact of COVID-19 will begin to be seen and felt as the
Most of the noticeable declines in average occupancy halfway point of 2020 approaches, but the first quarter
at the submarket level are in areas with a small multi- results were a product of mostly regular market forces.
family presence that added a new property – Kerrville
as an example. Average occupancy dropped from 98%
to 80% after the introduction of a new property. This ob-
viously isn’t hugely concerning, a lease-up is not instan-
taneous and one new property in an area with less than
30 conventional properties can make a big difference
in the numbers. One submarket that suffered a fairly sig-
nificant occupancy retraction without any new supply
was the Balcones Heights – Jefferson area. A 2.5% loss is
occupancy brought the average to just below 90% to
end March.
The largest reduction in average effective rent was in the
Downtown - Riverwalk – King William area, with a 2.5%
loss. Unsurprisingly, the two biggest gains were in sub-
markets with new supply. Greater New Braunfels gained
nearly 6% and Kerrville gained almost 3.5%. For submar-
kets without new units to lift rents up, the largest growth
for average rent was 2.8% in Seguin followed by 2.2% in
the East of Downtown – Inside Loop region.
Takeaways
The opening quarter of 2020 for multifamily in the Great-
er San Antonio area was a mixed bag. The level of new
supply for the quarter was the highest of the last three
years, accompanied by the lowest absorption of the last
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