It’s no secret that Central Texas is an attractive market for many things – for the high-tech industry, for entrepreneurs, for healthcare, and of course for private real estate investment. Over the past few years, Austin and San Antonio have topped many lists including best places to live, fastest-growing metro areas and now great place for investing in multifamily properties makes the list too.
While great weather, events like SXSW, and strong institutions like the University of Texas make the region well known, there’s more to the area’s appeal than music festivals and sunny weather. Here’s why we at Presario Ventures are happy to call Central Texas home, and why we know first-hand about why it’s a great place for multifamily real estate investment.
Secondary Markets
Like many primary markets around the country, growth in Austin and San Antonio has resulted in a rise in rental costs, particularly in the downtown cores. This, in turn, has pushed many residents outside of the central parts of both cities and into secondary markets. Some of the fastest-growing areas in the Austin and San Antonio markets are the suburbs such as Kyle, San Marcos, North and West San Antonio, and Lockhart. These markets are well poised to absorb the wave of rooftops heading their way, and prices are much lower than the housing stock in more central Austin, or San Antonio areas. For investors, that means higher cap rates and lower vacancy rates.
Over the past year, Presario has worked on several investments in these attractive secondary markets. The latest investment opportunity in the Presario portfolio is a Class A multifamily development in a high-growth San Antonio corridor 15 miles west of San Antonio. That submarket, known as Far West, has seen an influx of new residents in recent years, with demand for housing units outpacing supply.
Job Growth
Austin and San Antonio continue to enjoy strong job growth, with a net new job growth rate of just under 4% over the past 12 months recorded this February. Both are among the best performing among the 50 largest metro areas. At the same time, Austin MSA and San Antonio unemployment rates remained low, at just 3% and 3.4% respectively.
With job growth occurring over a wide range of industries – from professional and business services to construction and natural resources – there is a need for multifamily housing that can accommodate these new renters.
At the same time, the diversified economies of both metro areas are attractive for real estate investors, as they are seen as more resilient and recession-proof.