The San Antonio multifamily market is of growing interest to out-of-town buyers. The region’s bright economic outlook has attracted quite a number of investors in the past 12 months.
In one recent example, Commerce Capital, a private real estate investment firm with headquarters in Santa Barbara, Calif., sold the Whispering Hills apartment complex to Dallas-based Frontline Holdings, according to the San Antonio Business Journal. The price has not been made public.
Whispering Hills is a well-maintained, garden-style, Class B apartment complex with 164 units. It is located at 13658 O’Connor Road, close to Interstate Highway 35 and Wurzbach Parkway. Casey Fry, the broker who represented the seller, told the business journal that the building’s location, the growth prospects of the I-35 corridor and the prospective value-add opportunity available at the property through enhancing the unit interiors proved very attractive for investors.
According to Marcus & Millichap, transactions slowed slightly in the first quarter of 2013. However, improving property operations will encourage owners to list properties held through the downturn, and sales will accelerate as a result. The median price increased slightly in the past 12 months, reaching $48,000 per unit, while institutional properties were traded at a median price of $85,000 per unit during the same period.
Area job growth has encouraged rental rate increases. With an average effective rent increase of 4.4 percent year over year, they are expected to reach $834 per month by the end of the year. Research studies forecast that demand for rental units will rise in the metro area, too. As a consequence, vacancy will be pushed down to 5.5 percent, a significant 130-basis point drop from 2012.
Chart courtesy of Marcus & Millichap.