Investors are buying San Antonio apartment
complexes and builders are putting up new ones at a pace that reflects
unbridled optimism, according to a market assessment of 2003 and
2004.
Research firm Austin Investor Interests said developers have "tossed
aside the caution" to proceed at a record pace.
A record 1,658 apartment units were submitted for city permits
in the fourth quarter, giving the San Antonio area over 6,000
potential units coming to market over the next 24 months.
"What you're having right now with interest rates being
as low as they are and stocks performing as they have in recent
years, is a ton of capital looking for a haven," David Lynd
of San Antonio-based Lynd Co. said. "That's what is leading
to a lot of transactions.
"They can lock in interest rates today in the 5 to 6 percent
range on 10-year terms and hold the property," Lynd said.
"It makes the investment worth a tremendous amount. It's
a great time for people looking to sell, and buy, too."
Meanwhile, fourth-quarter occupancy fell less than 1 percent,
and net leasing activity was negative despite only 400 new units
added. About 70 percent of properties were offering concessions,
AII said.
However, the long-term picture is stronger. Citywide occupancy
has averaged above 91 percent over a decade, and the market has
absorbed 90 percent of new construction since the first quarter
of 2000. Rents have crawled but steadily upward.
Commercial investors at CB Richard Ellis also noted concession
levels have been decreasing, and there has been steady renovation
of older properties.
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