Back Where We Started

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It has been a year since the pandemic set in, stunning the nation and the world with an unprecedented halt to business, both personal and professional. The foray into the unknown had many predicting doom and gloom for all aspects of the economy, including the multifamily sector, which was faced with unemployed tenants and legal mandates that prohibited evictions. While the effects of COVID may have prevented stellar growth, negative repercussions were minimal, and a year later, the market is slightly ahead of where it was when the pandemic started.

2021 Apartment Submarket ComparisonIf the first quarter is any indication of the coming year, the San Antonio-New Braunfels market has picked up where it left off in terms of forward momentum. Apartment occupancy rates were up .5% for the quarter and .1% for the year to reach 91.85%. While these gains may not seem particularly noteworthy, they are significant in that there were over 1,300 new units added during the quarter, and almost 7,000 added over the past 12 months. The innovative efforts in leasing have paid off, as 2,500 more units were occupied during the quarter and absorption levels continue to outpace supply.

Rental rates, which saw no movement during 2020, made up for lost time and others moved to charging extra monthly fees to cover items that were previously included in rents, such as trash and pest control. While this practice is common in the newer units, expect to see older properties adopt the trend.

Construction, the one aspect of the market that saw minimal interruption over the past year, is beginning to face challenges that may slow future production. Building costs have skyrocketed over the past year as supply chains were interrupted. Lumber prices were reportedly up 400% at one point, and finish-out items, such as air conditioners and appliances, are not as readily available and have experienced significant cost increases as well. So far developers have not reported any compelling delays in units already underway, but some proposed properties could get pushed back.

Investor interest remains high for San Antonio, as 16 properties traded hands during the first quarter. Expect to see sales, occupancy and rental rates increase throughout the remainder of the year as life returns to its new normal.

Occupancy and Rental Rates

1Q21 Class A Stab Class A Class B Class C Totals  Qtr Change Ann Change
 OCC  Rent   OCC  Rent   OCC  Rent   OCC  Rent   OCC  Rent   OCC   Rent   OCC  Rent
NB 93.9% $1.38 95.4% $1.38 96% $1.41 96.1% $1.21 94.9% $1.37 1.4% 1.95% 2.0% 3.44%


Unit Mix

1Q21 Efficiency 1 Bdrm 2 Bdrm 3 Bdrm 4+ Bdrm Overall # of properties
 SF  Rent  SF  Rent  SF  Rent  SF  Rent  SF  Rent  SF  Rent  
539 $989 718 $1,089 1,066 $1,374 1,396 $1,797 1,884 $2,208 943 $1,289 33


Market Overall

1Q21 Current Construction CNV Completions Absorption Occupancy Rental Annual
Rentable Units CNV Const. 
Remaining
12 Mos 24 Mos 1Q21

Annual 
Change

1Q21

Annual
Change

1Q21

Annual
Change

Sales $/Unit
NB 6,295 744 247 433 554 857 94.85% 1.98% $1.37 3.44% 149,1

 

To see a listing of Multi-Family units in New Braunfels, click here