San Antonio Multifamily

San Antonio’s Breezy Summer Multifamily Report Summer 2018

Rent Growth Tapers

Transaction Volume Dwindles

Construction Leads Job Growth SAN ANTONIO MULTIFAMILY

Market Analysis Job Growth Fuels South Texas Summer 2018 On its 300th anniversary, San Antonio has a strong economy to show, Contacts with a thriving luxury multifamily market that’s creating opportunities Paul Fiorilla for investors looking to enter a stable market. The strong economic and Associate Director of Research population growth keep creating demand for housing, despite the recent [email protected] wave of supply that has tempered rent growth, up 1.1% year-over-year (800) 866-1124 x5764 through May to $1,002 and below the $1,381 U.S. average.

Jack Kern Up by 10.1%, the mining, logging and construction sector led San Antonio’s Director of Research and Publications employment expansion in the 12 months ending in March with the addition [email protected] of 5,800 jobs. With nearly 8,000 rental units underway, development activity (800) 866-1124 x2444 in the multifamily sector will likely maintain this positive trend. Several other developments across the metro will boost the construction sector, with a Author number of projects lined up, as well: the 462,000-square-foot Frost Bank Anca Gagiuc Tower, the multi-phase Essex Modern City and the $320-million University Associate Editor Village mixed-use project near University of Texas at San Antonio.

The multifamily transaction volume hit $427 million in 2018 through April. Most of the traded assets were in lower-rated classes, which influenced the per-unit price, resulting in a $2,000 slide to $101,428. With 6,700 units scheduled for completion by year’s end, we expect rents to rise 1.8% this year.

Recent San Antonio Transactions

The Flats at Big Tex Legacy Flats

City: San Antonio City: San Antonio Buyer: The Accend Cos. Buyer: PEM Real Estate Group Purchase Price: $69 MM Purchase Price: $35 MM Price per Unit: $205,667 Price per Unit: $112,839

Monterra Whispering Creek Villas

City: San Antonio City: San Antonio Buyer: Knightvest Capital Buyer: Hilltop Residential Purchase Price: $34 MM Purchase Price: $32 MM Price per Unit: $97,362 Price per Unit: $123,411

On the cover: Photo by Sean Pavone/iStockphoto.com 2 Transactions: Price Per Unit (San Antonio)

$160,000

$140,000 Transactions: Price Per Unit (San Antonio) $120,000 $160,000 $100,000 $140,000 $80,000 $120,000 $60,000 $100,000 $40,000 0 1 2 3 4 5 6 7 8 $80,000 1 1 1 1 01 01 01 20 20 2 201 20 2 2 201 20 $60,000

$40,000 National San Antonio 0 1 2 3 4 5 6 7 8 1 1 1 1 01 01 01 20 20 2 201 20 2 2 201 20

0 1 2 3 4 5 6 7 8 1 1 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2 National San Antonio

0 1 2 3 4 5 6 7 8 1 1 01 01 01 01 01 01 Employment Growth: YoY 6mo-avg (San Antonio) 2 20 2 20 2 201 2 2 2

4.0% Employment Growth: YoY 6mo-avg (San Antonio) 3.5% 4.0%

3.0% 3.5%

2.5% 3.0%

2.0% 2.5%

1.5% 2.0% 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- e e a e a e e a 1.5% S D M Jun-1 Sep-16 D M Jun-1 S D M 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- e e a National Sane Antonio a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M

Supply: Percentage of Stock (San Antonio) National San Antonio

4.0% Supply: Percentage of Stock (San Antonio)

4.0%3.0%

3.0%2.0%

2.0%1.0%

1.0%0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

0.0% National San Antonio 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

Supply: Development Pipeline as of May 2018 (San Antonio) National San Antonio

Supply: Development Pipeline as of May 2018 (San Antonio)

7,997 Units

11,613 Units

7,997 Units

11,613 Units

8,343 Units Rent Trends 8,343 Units Rents in San Antonio rose 1.1% year-over-year through May, below the national growth rate of 2.0%. The average overall rent stoodPlanned at $1,002,Prospective well belowUnder Construction the national average of $1,381. The supply imbalance has not only resulted in a softened rate of rent growth but also contributed to falling

occupancy,Transactions: whichTotal Volume dropped (San Antonio)Planned 130 basisProspective points year-over-yearUnder Construction through April at 92.3%, the lowest among

major$1,400 metros. 100 Transactions: Total Volume (San Antonio) Assets$1,200 in the working-class Renter-by-Necessity segment led growth, rising 1.5% to $841, while rates 80 $1,400 100 for Lifestyle$1,000 assets inched up 0.3% to $1,199. Elevated multifamily construction has also influenced payrolls,$1,200 especially in the construction sector, boosting household formation. 60 $800 80 $1,000 The number$600 of submarkets experiencing rent dips has dropped to eight, the steepest decrease40 coming $800 60 in Selma,$400 down 5.8% to $1,013. At $655, West Side was the least expensive submarket, due to its inventory being mostly made up of affordable communities. Rent growth there was 4.3% year-over-20 $600 40 year. The$200 metro’s most expensive submarkets remain Southtown/King William, up 1.0% to $1,443, and $400 $0 0 Beckmann, down 0.3% to $1,395. 20 $200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Population growth and the metro’s solid economy should propel rent growth to 1.8% for the year. $0 Volume in Millions Number of Properties 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 San Antonio vs. National Rent Growth (Sequential 3 Month, Year-Over-Year) Rent: YoY vs National (San Antonio) Volume in Millions Number of Properties

5.0%

Rent: YoY vs National (San Antonio) 4.0% 5.0% 3.0% 4.0% 2.0% 3.0% 1.0% 2.0% 0.0% 1.0%

0.0%

National San Antonio

Source: YardiMatrix Rent: Lifestyle vs RBN (San Antonio) National San Antonio 4.0% San Antonio Rent Growth by Asset Class (Sequential 3 Month, Year-Over-Year) Rent: Lifestyle vs RBN (San Antonio) 3.0% 4.0% 2.0% 3.0% 1.0% 2.0% 0.0% 1.0% -1.0% 0.0%

-1.0%

Lifestyle Renter-by-Necessity

Source: YardiMatrix

San Antonio Multifamily | Summer 2018 3 Economic Snapshot

San Antonio added 18,800 jobs in the 12 months ending in March, up 2.1% year-over-year, above the 1.7% U.S. rate. Growth occurred across most industries, except the information sector, which contracted by 600 jobs. The metro’s unemployment rate was 3.1% in April, well below average.

Mining, logging and construction led growth with the addition of 5,800 jobs, followed by the trade, transportation and utilities sector, which added 3,800 jobs. The strong development pipeline will maintain this trend: The Frost Bank Tower is about two-thirds complete and on schedule to open early

next year, while the multi-phase, $150Transactions: million Price Essex Per Unit Modern (San Antonio) City mixed-use development is currently underway. Additionally, the 1,900-acre$160,000 Port San Antonio plans to hire 5,000 people by 2020 and has already begun to do so: In late May, the$140,000 first facility at the newly built 90,000-square-foot Project Tech $120,000

was inaugurated and will serve the cybersecurity$100,000 and other digital industries.

$80,000 Organizations are expanding in the metro,$60,000 pushing office vacancy rates to 9.8%, up 10 basis points $40,000 0 1 2 3 4 5 6 7 8 year-over-year. Net absorption remained positive1 1 at 18,5951 square1 feet, according to NAI, and leasing 01 01 01 20 20 2 201 20 2 2 201 20 activity dropped to 365,000 square feet from 870,000 a year ago. There was 1.2 million square feet of National San Antonio space underway, with 665,000 square feet scheduled for delivery by year’s end. The 462,000-square-

0 1 2 3 4 5 6 7 8 foot Frost1 Bank1 Tower is set to be completed in the first quarter of 2019. 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2 San Antonio vs. National Employment Growth (Year-Over-Year) Employment Growth: YoY 6mo-avg (San Antonio)

4.0%

3.5%

3.0%

2.5%

2.0%

1.5% 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- e e a e a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M

National San Antonio

Sources: YardiMatrix, Bureau of Labor Statistics (not seasonally adjusted) Supply: Percentage of Stock (San Antonio)

San 4.0%Antonio Employment Growth by Sector (Year-Over-Year) Current Employment Year Change 3.0% Code Employment Sector (000) % Share Employment % 15 Mining, Logging and Construction 64 6.1% 5,800 10.1% 2.0% 40 Trade, Transportation and Utilities 183 17.4% 3,800 2.1% 70 Leisure and Hospitality 135 12.9% 2,900 2.2% 1.0% 60 Professional and Business Services 135 12.9% 2,100 1.6% 65 Education and Health Services 163 15.5% 1,900 1.2% 0.0% 30 Manufacturing2010 2011 2012 201349 2014 20154.7% 2016 2017 1,000 2018 YTD 2.1%

90 Government National 174San Antonio 16.6% 1,000 0.6% 80 Other Services 38 3.6% 900 2.4%

Supply:55 DevelopmentFinancial Pipeline Activities as of May 2018 (San Antonio) 89 8.5% - 0.0% 50 Information 20 1.9% -600 -2.9%

Sources: YardiMatrix, Bureau of Labor Statistics

7,997 Units 11,613 Units San Antonio Multifamily | Summer 2018 4

8,343 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity Demographics Affordability

San Antonio’s strong economy has held onto a strong growth rate, putting more pressure on demand for workforce housing. The median home value was up 2.0% in 2017, to $189,189, which is about $55,000 higher than it was 10 years ago, at the start of the cycle. Owning remains more affordable than renting, accounting for 15% of the median income, while rents comprise 20%.

City officials are working on policy changes anticipated to be released in August. As per the City’s Comprehensive Housing Needs Assessment, the metro’s housing need was at 179,960 units in 2016, with affordable housing becoming increasingly necessary.

San Antonio Rent vs. Own Affordability as a Percentage of Income

25%25%

20%20%

15%15% 10% 10% 5% 5% 0% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Rent/Income Mort/Income Rent/Income Mort/Income

Sources: YardiMatrix, Moody’s Analytics

San Antonio Median Home Price

$200,000 $200,000 $175,000 $175,000 $150,000 $150,000 $125,000 $125,000 $100,000 $100,000$75,000 $75,000$50,000 $50,000$25,000 $25,000$0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Moody’s Analytics

Population San Antonio vs. National Population

San Antonio added more 2013 2014 2015 2016 2017 than 47,700 residents in 2017, representing a growth rate of National 316,234,505 318,622,525 321,039,839 323,405,935 325,719,178 nearly 2.0%.

More than 194,000 residents San Antonio 2,279,878 2,328,419 2,379,054 2,426,211 2,473,974 moved to San Antonio Metro between 2013 and 2017, an 8.5% increase. Sources: U.S. Census, Moody’s Analytics

San Antonio Multifamily | Summer 2018 5 Transactions: Price Per Unit (San Antonio) Transactions: Price Per Unit (San Antonio) $160,000 $160,000 $140,000 $140,000 $120,000 $120,000 $100,000 $100,000 $80,000 $80,000 $60,000 $60,000 $40,000 $40,000 0 1 2 3 4 5 6 7 8 1 1 1 0 1 2 1 3 4 5 6 7 8 01 01 1 01 1 1 1 20 20 2 201 20 2 2 201 01 20 01 01 20 20 2 201 20 2 2 201 20

Supply National San Antonio National San Antonio

0 1 2 3 4 5 60 17 28 3 4 5 6 7 8 1 1 1 1 01 01 Overall01 0101deliveries01 0101 slowed01 01down01 01 in 2018, but some areas are lined up to boost inventory. About 1,500 2 20 2 20 2 201 22 202 22 20 2 201 2 2 2 units were delivered in San Antonio by May, 0.8% of total stock. The metro’s booming population and

consistent employmentEmployment growth Growth: have YoY 6mo-avgbeenEmployment accelerating(San Growth: Antonio) YoY 6mo-avg housing (San Antonio) demand in the Alamo City.

4.0% 4.0% Nearly 8,000 units were under construction in the metro, with roughly 6,700 scheduled for completion

by year’s3.5% end. Adding in the planned and prospective projects, the development pipeline totals nearly 3.5% 28,000 units. Even though occupancy in stabilized properties dropped 130 basis points year-over-year through3.0% April to 92.3%, there are no concerns of overbuilding. 3.0%

2.5% Construction has been mostly concentrated in the northern part of the metro, but it’s starting to pick 2.5% up in core submarkets, as well. The submarkets with the most intense development activity remain 2.0% 2.0% Beckmann, with 2,142 units in seven properties, and Southtown/King William (1,052 units). 1.5% 1.5% The largest community5 underway is6 Legacy6 Alliance Holdings’6 427-unit Villas7 at the7 Rim in Beckmann, a -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- 5 e 6 e 6 a 6 e 7 a 7 e e a two-building property slated for completionJun-1 at the start of the summer.Jun-1 -15 S 1 D M -1 Sep-1617 D M 1 -17 S 18 D M p-1 c r- c r- p- c r- e e a e a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M National San Antonio San Antonio vs. NationalNational CompletionsSan Antonioas a Percentage of Total Stock (as of May 2018) Supply: Percentage of Stock (San Antonio)

Supply: Percentage of Stock (San Antonio)4.0%

4.0% 3.0%

3.0% 2.0%

2.0% 1.0%

1.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

0.0% National San Antonio 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD Source: YardiMatrix Supply: Development Pipeline as of May 2018National (San Antonio) San Antonio

Supply: Development PipelineDevelopment as of May 2018 (San Antonio)Pipeline (as of May 2018) San Antonio Completions (as of May 2018) Transactions: Price Per Unit (San Antonio)

$160,000

7,997 Units $140,000

11,613 Units $120,000

$100,000 7,997 Units $80,000 11,613 Units 8,343 Units $60,000

$40,000 0 1 2 3 4 5 6 7 8 1 1 1 1 01 01 01 20 20 2 201 20 2 2 201 20 8,343 Units

Planned Prospective Under Construction National San Antonio

Transactions: Total Volume (San Antonio) 0 1 2 3 4 5 6 7 8 1 1 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2 $1,400Planned Prospective Under Construction 100

$1,200 Source: YardiMatrix Source: YardiMatrix 80 Transactions: Total Volume (San Antonio) Employment Growth: YoY 6mo-avg (San Antonio) $1,000 $1,400 100 $800 4.0% 60 $1,200 $600 San Antonio Multifamily80 | Summer40 2018 6 $1,000 $400 3.5% 60 20 $800 $200 3.0% $600 $0 40 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $400 2.5% 20 $200 Volume in Millions Number of Properties

$0 0 2009Rent: YoY 2010 vs National 2011 (San Antonio) 2012 2013 2014 2015 20162.0% 2017 2018 5.0% Volume in Millions Number of Properties 1.5% 4.0% 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 Rent: YoY vs National (San Antonio)3.0% p-1 c r- c r- p- c r- e e a e a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M 5.0% 2.0%

4.0% 1.0% National San Antonio

3.0% 0.0%

Supply: Percentage of Stock (San Antonio) 2.0%

1.0% 4.0% National San Antonio

0.0% Rent: Lifestyle vs RBN (San Antonio)

4.0% 3.0%

3.0% National San Antonio 2.0% 2.0%

Rent: Lifestyle vs RBN (San Antonio) 1.0% 4.0% 0.0% 1.0% 3.0% -1.0% 2.0% 0.0% 1.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD Lifestyle Renter-by-Necessity 0.0% National San Antonio -1.0%

Supply: Development Pipeline as of May 2018 (San Antonio)

Lifestyle Renter-by-Necessity

7,997 Units

11,613 Units

8,343 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity Transactions: Price Per Unit (San Antonio)

$160,000

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000 0 1 2 3 4 5 6 7 8 1 1 1 1 01 01 01 20 20 2 201 20 2 2 201 20

National San Antonio

0 1 2 3 4 5 6 7 8 1 1 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2

Employment Growth: YoY 6mo-avg (San Antonio)

4.0%

3.5%

3.0%

2.5%

2.0%

1.5% 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- e e a e a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M

National San Antonio

Supply: Percentage of Stock (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

National San Antonio

TransactionsSupply: Development Pipeline as of May 2018 (San Antonio)

More than $427 million in multifamily properties traded in 2018 through April. Of the 26 properties that changed hands during this time, the majority were in the Renter-by-Necessity segment. This has resulted in a $2,000 drop in the average per-unit price to $101,428. Yet, finding value-add assets is increasingly challenging in San Antonio.7,997 Units 11,613 Units The most active submarkets in the 12 months ending in April were University of Texas at San Antonio ($145 million), Southtown/King William ($135 million) and Beckmann ($131 million). The priciest community to change ownership in 2018 was The Flats at Big Tex—The Accend Cos. paid roughly $69 8,343 Units million ($205,667 per unit) to The Lifshutz Co. for the 336-unit, six-building asset spread across more than 9 acres in the Southtown/King William submarket.

Planned Prospective Under Construction

San Antonio Sales Volume and Number of Properties Sold (as of April 2018) Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Volume in Millions Number of Properties

Source: YardiMatrix Rent: YoY vs National (San Antonio)

5.0% Top Submarkets for Transaction Volume1 San Antonio vs. National Sales Price per Unit 4.0% Transactions: Price Per Unit (San Antonio)

Submarket Volume $160,000 3.0% ($MM) $140,000 University2.0% of Texas at 145 $120,000 San Antonio 1.0% $100,000 Southtown/King William 135 $80,000 0.0% Beckmann 131 $60,000 Far North Side 114 $40,000 0 1 2 3 4 5 6 7 8 1 1 1 1 01 01 01 Terrell Hills 111 20 20 2 201 20 2 2 201 20 National San Antonio Helotes 97 National San Antonio

OaklandRent: Lifestyle Estates vs RBN (San Antonio) 81 Source: YardiMatrix USAA0 Area1 2 3 4 5 6 7 77 8 4.0%1 1 01 01 01 01 01 01 2 20 2 20 2 201 2 2 2 Source:3.0% YardiMatrix 1 From May 2017 to April 2018 2.0% Employment Growth: YoY 6mo-avg (San Antonio)

1.0% 4.0% 0.0%

3.5%-1.0% San Antonio Multifamily | Summer 2018 7

3.0%

Lifestyle Renter-by-Necessity 2.5%

2.0%

1.5% 5 6 6 6 7 7 -15 1 -1 17 1 -17 18 p-1 c r- c r- p- c r- e e a e a e e a S D M Jun-1 Sep-16 D M Jun-1 S D M

National San Antonio

Supply: Percentage of Stock (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

National San Antonio

Supply: Development Pipeline as of May 2018 (San Antonio)

7,997 Units

11,613 Units

8,343 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity News in The Metro Brought to you by:

IPA Brokers Sale Atlanta Investor Of San Antonio Expands in the Metro Value-Add With Foreign Funds

Community Benimax increased its San JBT Investments Antonio footprint with the purchased Fredericksburg acquisition of its second Place with the help of a multifamily property in a loan from Deutsche Bank. deal arranged by The asset was more than ARA Newmark. 90 percent leased at the time of sale.

Kairoi Residential Twin Creeks at Alamo Buys Again in Texas Ranch Changes

The San Antonio-based Ownership company acquired the Will Balthrope and 308-unit Broadstone City Jordan Featherston of Park in Houston. According Institutional Property to Yardi Matrix, Alliance Advisors brokered the sale Residential Co. sold the of the property. An out-of- property, which it had state investor bought owned since 2014. the asset.

Luxury San Antonio JLL Brokers Sale Community Of San Antonio Asset

Changes Hands Achieve Investment According to Yardi Matrix, Group’s Villa de Oro the property came online is located in the in 2016 and is 83 percent southwestern part of the occupied. ARA Newmark city and includes 150 units, brokered the transaction a clubhouse, a playground on behalf of the seller. and a spa.

Log on to Multi-HousingNews.com to get the latest metro-specific news.

San Antonio Multifamily | Summer 2018 8 San Antonio Submarkets

Area # Submarket Area # Submarket 1 Southtown/King William 21 Longhorn 2 West Side 22 Windcrest 3 Southwest Research Institute 23 City South 4 Balcones Heights 24 Far West Side 5 West Alamo Heights 25 Leon Valley–West 6 Alamo Heights–Central 26 Northwest Side 7 Terrell Hills 27 University of Texas at San Antonio 8 Fort Sam Houston 28 Shavano Park 9 East Side 29 Hill Country Village 10 Southeast Side 30 Far North Central 11 Terrell Wells 31 Hollywood Park/Welmore 12 Southside/Columbia Heights 32 Northeast Side 13 Lackland Terrace 33 Helotes 14 Leon Valley–East 34 Beckmann 15 Oak Hills Country Club 35 Far North Side 16 Oakland Estates 36 Universal City 17 USAA Area 37 Schertz 18 Robards 38 Selma 19 Castle Hills 39 New Braunfels 20 North Loop 40 Seguin

San Antonio Multifamily | Summer 2018 9 Definitions

Lifestyle households (renters by choice) have wealth sufficient to own but have chosen to rent. Discretionary households, most typically a retired couple or single professional, have chosen the flexibility associated with renting over the obligations of ownership.

Renter-by-Necessity households span a range. In descending order, household types can be:

A young-professional, double-income-no-kids household with substantial income but without wealth needed to acquire a home or condominium;

Students, who also may span a range of income capability, extending from affluent to barely getting by;

Lower-middle-income (“gray-collar”) households, composed of office workers, policemen, firemen, technical workers, teachers, etc.;

Blue-collar households, which may barely meet rent demands each month and likely pay a disproportionate share of their income toward rent;

Subsidized households, which pay a percentage of household income in rent, with the balance of rent paid through a governmental agency subsidy. Subsidized households, while typically low income, may extend to middle-income households in some high-cost markets, such as New York City;

Military households, subject to frequency of relocation.

These differences can weigh heavily in determining a property’s ability to attract specific renter market segments. The five-star resort serves a very different market than the down-and-outer motel. Apartments are distinguished similarly, but distinctions are often not clearly definitive without investigation. TheYardi® Matrix Context rating eliminates that requirement, designating property market positions as:

Market Position Improvements Ratings Discretionary A+ / A High Mid-Range A- / B+ Low Mid-Range B / B- Workforce C+ / C / C- / D

The value in application of the Yardi® Matrix Context rating is that standardized data provides consistency; information is more meaningful because there is less uncertainty. The user can move faster and more efficiently, with more accurate end results.

The Yardi® Matrix Context rating is not intended as a final word concerning a property’s status—either improvements or location. Rather, the result provides reasonable consistency for comparing one property with another through reference to a consistently applied standard.

To learn more about Yardi® Matrix and subscribing, please visit www.yardimatrix.com or call Ron Brock, Jr., at 480-663-1149 x2404.

San Antonio Multifamily | Summer 2018 10 Market Data & Analysis Fogelman drives deals with Yardi® Matrix

“Yardi Matrix is a major contributor to our profitable investments and informed property management.”

Mark Fogelman President Fogelman Properties

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San Antonio Multifamily | Summer 2018 12 San Antonio In High Gear Multifamily Report Winter 2018

Job Gains Sustain Demand

Transaction Volume Hits Cycle High

Development Activity Remains Elevated SAN ANTONIO MULTIFAMILY

Market Analysis Construction Surge Stalls Rent Growth Winter 2018 Above-trend employment gains, falling occupancy rates and elevated deliveries Contacts characterized San Antonio’s multifamily market in 2017. Texas was among the Paul Fiorilla top five states in the U.S. for job growth last year, thanks in part to San Antonio’s Associate Director of Research contribution. Rents were up 0.8%, reaching $987 but well below the 2.5% national [email protected] rate. Even though a supply surge dampened rent growth, the metro’s multifamily (800) 866-1124 x5764 fundamentals remain healthy.

Jack Kern Employment growth was diverse in 2017, with education and health services Director of Research and Publications and mining, logging and construction leading the expansion. In addition to the [email protected] hefty multifamily pipeline, new projects across the metro kept the construction (800) 866-1124 x2444 industry busy. The list of notable projects underway includes the 23-story Frost Bank Tower, anticipated for delivery in 2019, and Oden Hughes’ 57-acre mixed- Author use development, to be delivered in three stages, with the first, 338-unit phase Anca Gagiuc scheduled to open in late 2018. Associate Editor San Antonio occupancy in stabilized properties remains the lowest among major U.S. metros, falling 90 basis points in 2017, to 92.9% as of December. Investors have set their eyes on San Antonio: Nearly $1.4 billion in multifamily properties changed hands in 2017, representing an all-time cycle high. Apartment construction is strong, with more than 7,100 units underway and an additional 19,000 in various planning stages, leading Yardi Matrix to forecast rent growth of 1.5% in 2018.

Recent San Antonio Transactions

Agave The Preserve on Fredericksburg

City: San Antonio City: San Antonio Buyer: Castle Lanterra Properties Buyer: Cortland Partners Purchase Price: $66 MM Purchase Price: $57 MM Price per Unit: $188,378 Price per Unit: $151,596

Marquis at Stone Oak Hidden Lake

To Subscribe Hollie Zepke City: San Antonio City: San Antonio Audience Development Specialist Buyer: Bluerock Real Estate Buyer: Starwood Capital Group [email protected] Purchase Price: $55 MM Purchase Price: $46 MM (800) 866-1124 x5389 Price per Unit: $154,609 Price per Unit: $120,000

On the cover: Photo by Sean Pavone/iStockphoto.com 2 Transactions: Price Per Unit (San Antonio)

$140,000

$120,000

Transactions: Price Per Unit (San Antonio) $100,000 $140,000 $80,000 $120,000 $60,000 $100,000 $40,000 $80,000 2009 2010 2011 2012 2013 2014 2015 2016 2017

$60,000 National San Antonio

$40,000 0 1 2 3 4 5 7 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 1 0 01 0 01 01 01 01 2 2 2 2 2 2 2016 2 National San Antonio

Employment Growth: YoY 6mo-avg (San Antonio) 0 1 2 3 4 5 7 1 1 0 01 0 01 01 01 01 2 2 2 2 2 2 2016 2

5.0% Employment Growth: YoY 6mo-avg (San Antonio)

3.0%5.0%

1.0%3.0%

-1.0%1.0%

-1.0% National San Antonio

Supply: Percentage of Stock (San Antonio) National San Antonio 4.0%

Supply: Percentage of Stock (San Antonio)

3.0%4.0%

2.0%3.0%

1.0%2.0%

0.0%1.0% 2010 2011 2012 2013 2014 2015 2016 2017

National San Antonio 0.0% 2010 2011 2012 2013 2014 2015 2016 2017

Supply: Development Pipeline as of Dec 2017 (San Antonio) National San Antonio

Supply: Development Pipeline as of Dec 2017 (San Antonio)

7,192 Units

14,047 Units 7,192 Units

5,011 Units

14,047 Units

Rent Trends 5,011 Units

In line with nationwide trends, San Antonio rent gains were modest in 2017. Average year-over-year growth Planned Prospective Under Construction decelerated to 0.8%, down from 2.9% one year prior and trailing the 2.5% U.S. rate. Occupancy dropped 90 basis points in one year, to 92.9% as of December, marking the lowest occupancy rate among major U.S. Transactions: Total Volume (San Antonio) metros. This trend signals thatPlanned San AntonioProspective needsUnder more Construction time to absorb the spate of new stock. $1,400 100

The Transactions:working-class$1,200 Total Volume (San Renter-by-Necessity Antonio) segment led growth, increasing by 1.5% to $831, while rates for Lifestyle assets stayed flat, at $1,187. Employment growth maintained a steady pace of household formation,80 $1,000$1,400 100 but demand for workforce apartments is still greater. $1,200$800 60 80 About$1,000 10 San Antonio submarkets saw rents dip in 2017—Selma, one of the metro’s mid-tier submarkets, registered$600 the steepest drop, down 3.0% to $1,022. West Side, the metro’s most affordable submarket,40 60 registered$400$800 the largest spike of 8.9%, resulting in average rent of $637. Southtown/King William ($1,395) and 20 Beckmann$200$600 ($1,343) have the metro’s highest rents. 40 $400 As the construction$0 surge continues to dampen demand, we expect rent growth to remain tepid. Yardi0 Matrix 2009 2010 2011 2012 2013 2014 2015 2016 2017 20 forecasts$200 rents will appreciate by 1.5% in 2018. Volume in Millions Number of Properties $0 0 San Antonio vs. National2009 2010 Rent Growth 2011 (Sequential 2012 2013 3-Month, 2014 Year-Over-Year) 2015 2016 2017 Rent: YoY vs National (San Antonio) Volume in Millions Number of Properties 6.0%

Rent: YoY vs National (San Antonio)

4.0%6.0%

2.0%4.0%

0.0%2.0%

0.0%

National San Antonio

Source: YardiMatrix Rent: Lifestyle vs RBN (San Antonio) National San Antonio 5.0% San Antonio Rent Growth by Asset Class (Sequential 3-Month, Year-Over-Year) Rent:4.0% Lifestyle vs RBN (San Antonio)

3.0%5.0%

2.0%4.0%

1.0%3.0%

0.0%2.0%

-1.0%1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity

Source: YardiMatrix

San Antonio Multifamily | Winter 2018 3 Economic Snapshot

San Antonio continues to be one of the country’s most stable regional economies, adding jobs at a faster pace than the nation. The metro gained 30,100 jobs in the 12 months ending in October, up 2.4% year over year and 60 basis points above the U.S. average. Unemployment dropped to 3.0% as of November, staying among the lowest levels in the country and 90 basis points below the national rate.

Leading the way was the education and health services sector, which added 11,900 jobs, marking a 7.4% expansion, followed by mining, logging and construction, which added 6,800 jobs. These sectors have Transactions: Price Per Unit (San Antonio)

experienced the strongest growth in recent$140,000 years. The robust development pipeline and the city’s major projects

will keep activity elevated: The Frost Bank$120,000 Tower in downtown San Antonio is slated for completion in 2019 and

Port San Antonio, which aims to add 5,000$100,000 new jobs by 2020, recently broke ground on a multi-phase facility

that will host additional cybersecurity operations$80,000 and could total more than 500,000 square feet.

$60,000 San Antonio’s office market registered steady leasing activity in 2017, with more than 420,000 square feet in $40,000 annual net absorption, according to CBRE. Yet, demand2009 2010 2011 2012remains 2013 2014 consistent, 2015 2016 2017 active tenant requirements totaling almost 1.2 million square feet. Vacancy dropped to 14.4%,National downSan Antonio 30 basis point from one year prior, while total development was nearly 900,000 square feet. 0 1 2 3 4 5 7 1 1 0 01 0 01 01 01 01 2 2 2 2 2 2 2016 2 San Antonio vs. National Employment Growth (Year-Over-Year) Employment Growth: YoY 6mo-avg (San Antonio)

5.0%

3.0%

1.0%

-1.0%

National San Antonio

Sources:Supply: Percentage YardiMatrix, of Stock (San Bureau Antonio) of Labor Statistics (not seasonally adjusted)

4.0% San Antonio Employment Growth by Sector (Year-Over-Year)

3.0% Current Employment Year Change Code Employment Sector (000) % Share Employment %

652.0%Education and Health Services 172 16.3% 11,900 7.4% 15 Mining, Logging and Construction 65 6.2% 6,800 11.6%

701.0%Leisure and Hospitality 133 12.6% 5,300 4.2% 90 Government 176 16.7% 3,100 1.8%

600.0%Professional and Business Services 136 12.9% 1,900 1.4% 55 Financial Activities2010 2011 2012 201389 20148.4% 2015 2016 1,100 2017 1.3% 80 Other Services National 37San Antonio 3.5% 700 1.9% 30 Manufacturing 49 4.6% 300 0.6% Supply: Development Pipeline as of Dec 2017 (San Antonio) 40 Trade, Transportation and Utilities 178 16.9% -100 -0.1% 50 Information 20 1.9% -900 -4.3%

Sources: YardiMatrix, Bureau of Labor Statistics

7,192 Units

San Antonio Multifamily | Winter 2018 4 14,047 Units

5,011 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

6.0%

4.0%

2.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity Demographics Affordability

Home values are rising faster than incomes in San Antonio. Home prices in the Alamo City rose 17.4% over the past five years, to $188,131. However, owning remains the more affordable option, with the average mortgage payment accounting for 15% of the median income, as compared to 20% for the average rent.

In 2018, the city is set to receive as much as $19.5 million from the U.S. Department of Housing and Urban Development for several affordable communities, along with infrastructure and support programs. Moreover, a 296-unit affordable community on the city’s Northwest side was approved, largely funded through the San Antonio Housing Trust.

San Antonio25% Rent vs. Own Affordability as a Percentage of Income

25%20%

20%15%

15%10%

10%5%

5%0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0% 2008 2009 2010 2011Rent/Income2012 2013Mort/Income2014 2015 2016 2017

Rent/Income Mort/Income Sources: YardiMatrix, Moody’s Analytics

San Antonio Median Home Price

$200,000 $175,000 $200,000 $150,000 $175,000 $125,000 $150,000 $100,000 $125,000 $75,000 $100,000 $50,000 $75,000$25,000 $50,000$0 $25,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Moody’s$0 Analytics 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Population San Antonio vs. National Population

San Antonio added nearly 2012 2013 2014 2015 2016 48,000 residents in 2016 for a 2.0% increase, almost triple National 313,998,379 316,204,908 318,563,456 320,896,618 323,127,513 the U.S. average. San Antonio 2,237,381 2,281,831 2,331,197 2,381,703 2,429,609 The metro added more than Metro 275,000 people between 2010 and 2016, marking a Sources: U.S. Census, Moody’s Analytics 12.8% expansion.

San Antonio Multifamily | Winter 2018 5 Transactions: Price Per Unit (San Antonio) Transactions: Price Per Unit (San Antonio) $140,000 $140,000 $120,000 $120,000 $100,000 $100,000 $80,000 $80,000

$60,000 $60,000

$40,000 $40,000 2009 2010 2011 2012 2013 20142009 2015 2010 2016 2011 2017 2012 2013 2014 2015 2016 2017

Supply National San Antonio National San Antonio

0 1 2 3 4 5 7 0 1 2 Some3 4 5,30051 units17 were delivered in 2017, representing 2.9% of the total stock, 50 basis points above 1 1 0 01 0 01 01 01 01 0 01 0 01 01 012 2 201 2 2 2 2016 2 2 2 2 2 the2 national2 2016 average.2 This follows 2016’s cycle peak of more than 6,600 units. Robust employment and

population growth have beenEmployment the Growth: main YoY 6mo-avg driversEmployment (San Antonio) of Growth: accelerated YoY 6mo-avg (San Antonio) housing demand in San Antonio.

More 5.0%than 7,000 units were underway in San Antonio as of December. Considering planned and prospective 5.0% projects, the pipeline adds up to 26,250 units. Occupancy dropped 90 basis points in 2017, raising the issue of overbuilding on the higher end of the spectrum, which could delay or cancel some upscale projects. 3.0% 3.0% Construction activity has been most intense across submarkets to the north and west of the city, with central areas and those southwest of the urban core are also becoming more attractive to developers lately. 1.0% 1.0% Beckmann continues to lead the development surge, with 1,709 units under construction, followed by New Braunfels (988 units), which exceeded Southtown/King William’s 912 units under development. -1.0% -1.0% The largest developments underway are located in Beckmann. The 427-unit Villas at the Rim owned by Legacy Alliance Holdings is slated for completion by the end of March 2018, while Tribute at the Rim, a 380- unit community owned by The Lynd Cos., is anticipated for delivery by February 2018. National San Antonio San Antonio vs. National CompletionsNational San Antonioas a Percentage of Total Stock (as of December 2017) Supply: Percentage of Stock (San Antonio)

Supply: Percentage of Stock (San Antonio)4.0%

4.0%

3.0%

3.0% 2.0%

2.0% 1.0%

1.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017

0.0% National San Antonio 2010 2011 2012 2013 2014 2015 2016 2017 Source: YardiMatrix Supply: Development Pipeline as of Dec 2017 (San Antonio)National San Antonio

Development Pipeline (as of December 2017) San Antonio Completions (as of December 2017) Supply: Development Pipeline as of Dec 2017 (San Antonio) Transactions: Price Per Unit (San Antonio)

$140,000

7,192 Units $120,000

14,047 Units $100,000 7,192 Units

5,011 Units $80,000

14,047 Units $60,000

5,011 Units $40,000 2009 2010 2011 2012 2013 2014 2015 2016 2017

Planned Prospective Under Construction National San Antonio

Transactions: Total Volume (San Antonio) 0 1 2 3 4 5 7 1 1 0 01 0 01 01 01 01 $1,400 Planned Prospective Under Construction 2 2 2 2 2 2 2016 1002

$1,200 Source: YardiMatrix Source: YardiMatrix 80 Transactions: Total Volume (San Antonio) $1,000 Employment Growth: YoY 6mo-avg (San Antonio) $1,400 100 $800 60 $1,200 San Antonio Multifamily80 | Winter 2018 6 $600 5.0% 40 $1,000 $400 $800 60 20 $200 $600 3.0% $0 40 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 $400 Volume in Millions Number of Properties 20 $200 1.0% $0 Rent: YoY vs National (San Antonio) 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 6.0%

Volume in Millions Number of Properties -1.0% 4.0% Rent: YoY vs National (San Antonio)

6.0% 2.0% National San Antonio 4.0% 0.0%

Supply: Percentage of Stock (San Antonio) 2.0% 4.0% National San Antonio

0.0% Rent: Lifestyle vs RBN (San Antonio) 5.0% 3.0%

4.0%

3.0% National San Antonio 2.0% Rent: Lifestyle vs RBN (San Antonio) 2.0%

5.0% 1.0%

4.0% 0.0% 1.0% 3.0% -1.0%

2.0% 0.0% 1.0% Lifestyle Renter-by-Necessity 2010 2011 2012 2013 2014 2015 2016 2017 0.0% National San Antonio -1.0%

Supply: Development Pipeline as of Dec 2017 (San Antonio)

Lifestyle Renter-by-Necessity

7,192 Units

14,047 Units

5,011 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

6.0%

4.0%

2.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity Transactions: Price Per Unit (San Antonio)

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000 2009 2010 2011 2012 2013 2014 2015 2016 2017

National San Antonio

0 1 2 3 4 5 7 1 1 0 01 0 01 01 01 01 2 2 2 2 2 2 2016 2

Employment Growth: YoY 6mo-avg (San Antonio)

5.0%

3.0%

1.0%

-1.0%

National San Antonio

Supply: Percentage of Stock (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0% 2010 2011 2012 2013 2014 2015 2016 2017

National San Antonio

TransactionsSupply: Development Pipeline as of Dec 2017 (San Antonio)

Investor appetite remained high in San Antonio in 2017, with nearly $1.4 billion in multifamily properties changing hands, a new cycle high. Of the 74 properties that traded last year, half are in the Renter-by- Necessity segment and half in the Lifestyle segment, which reflects growing investor interest in San Antonio across asset classes. However,7,192 Units value-add opportunities are drying up, as the number of Class B and C properties available for sale is shrinking. 14,047 Units At $107,722, San Antonio per-unit prices were up 24.8% in 2017, surpassing the $100,000 mark for the first time this cycle. The most active5,011 submarkets Units in 2017 were neighboring Beckmann ($210 million) and Far North Side ($114 million), where eight properties totaling 2,214 units traded at $127,966 per unit. The most expensive San Antonio property to change hands in 2017 was Agave, a 349-unit asset for which Castle Lanterra Properties paid Greystar roughly $66 million, or $188,372 per unit.

Planned Prospective Under Construction San Antonio Sales Volume and Number of Properties Sold (as of December 2017) Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017

Volume in Millions Number of Properties

Source: YardiMatrix Rent: YoY vs National (San Antonio)

6.0% Top Submarkets for Transaction Volume1 San Antonio vs. National Sales Price per Unit Transactions: Price Per Unit (San Antonio)

4.0% Submarket Volume ($MM) $140,000

Beckmann 210 $120,000 Far North Side 114 2.0% $100,000 University of Texas at San Antonio 111 $80,000 USAA Area 110 0.0% Northwest Side 98 $60,000

Southtown/King William 66 $40,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 Terrell Hills 63 National San Antonio Leon Valley–West 60 National San Antonio

Rent: Lifestyle vs RBN (San Antonio) Source: YardiMatrix Source: YardiMatrix

1 05.0% 1 2 3 4 5 7 From1 January 20171 to December 2017 0 01 0 01 01 01 01 2 2 2 2 2 2 2016 2 4.0%

3.0% Employment Growth: YoY 6mo-avg (San Antonio) 2.0%

1.0% 5.0% 0.0% San Antonio Multifamily | Winter 2018 7 -1.0%

3.0%

Lifestyle Renter-by-Necessity

1.0%

-1.0%

National San Antonio

Supply: Percentage of Stock (San Antonio)

4.0%

3.0%

2.0%

1.0%

0.0% 2010 2011 2012 2013 2014 2015 2016 2017

National San Antonio

Supply: Development Pipeline as of Dec 2017 (San Antonio)

7,192 Units

14,047 Units

5,011 Units

Planned Prospective Under Construction

Transactions: Total Volume (San Antonio)

$1,400 100

$1,200 80 $1,000

$800 60

$600 40 $400 20 $200

$0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017

Volume in Millions Number of Properties

Rent: YoY vs National (San Antonio)

6.0%

4.0%

2.0%

0.0%

National San Antonio

Rent: Lifestyle vs RBN (San Antonio)

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Lifestyle Renter-by-Necessity Read All About It!

Ernst & Young Takes 54 KSF At Farinon Business Park

Berkadia Arranges Sale Of 248-Unit Community

HFF Brokers Sale Of San Antonio Retail Asset

WWC Expands Footprint In San Antonio

Get the latest San Antonio real estate news at

San Antonio image by folkinsg/iStockphoto.com San Antonio Submarkets

Area # Submarket Area # Submarket 1 Southtown/King William 21 Longhorn 2 West Side 22 Windcrest 3 Southwest Research Institute 23 City South 4 Balcones Heights 24 Far West Side 5 West Alamo Heights 25 Leon Valley-West 6 Alamo Heights-Central 26 Northwest Side 7 Terrell Hills 27 University of Texas at San Antonio 8 Fort Sam Houston 28 Shavano Park 9 East Side 29 Hill Country Village 10 Southeast Side 30 Far North Central 11 Terrell Wells 31 Hollywood Park/Welmore 12 Southside/Columbia Heights 32 Northeast Side 13 Lackland Terrace 33 Helotes 14 Leon Valley-East 34 Beckmann 15 Oak Hills Country Club 35 Far North Side 16 Oakland Estates 36 Universal City 17 USAA Area 37 Schertz 18 Robards 38 Selma 19 Castle Hills 39 New Braunfels 20 North Loop 40 Seguin

San Antonio Multifamily | Winter 2018 9 Definitions

Renter-by-Necessity households span a range. In descending order, household types can be:

A young-professional, double-income-no-kids household with substantial income but without wealth needed to acquire a home or condominium;

Students, who also may span a range of income capability, extending from affluent to barely getting by;

Lower-middle-income (“gray-collar”) households, composed of office workers, policemen, firemen, technical workers, teachers, etc.;

Blue-collar households, which may barely meet rent demands each month and likely pay a disproportionate share of their income toward rent;

Military households, subject to frequency of relocation.

Market Position Improvements Ratings Discretionary A+ / A High Mid-Range A- / B+ Low Mid-Range B / B- Workforce C+ / C / C- / D

To learn more about Yardi® Matrix and subscribing, please visit www.yardimatrix.com or call Ron Brock, Jr., at 480-663-1149 x2404.

San Antonio Multifamily | Winter 2018 10 What’s the best choice for CRE news & views?

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This document, publication and/or presentation (collectively, “document”) is protected by copyright, trademark and other intellectual property laws. Use of this document is subject to the terms and conditions of Yardi Systems, Inc. dba Yardi Matrix’s Terms of Use (http:// www.yardimatrix.com/Terms) or other agreement including, but not limited to, restrictions on its use, copying, disclosure, distribution and decompilation. No part of this document may be disclosed or reproduced in any form by any means without the prior written authorization of Yardi Systems, Inc. This document may contain proprietary information about software and service processes, algorithms, and data models which is confidential and constitutes trade secrets. This document is intended for utilization solely in connection with Yardi Matrix publications and for no other purpose.

San Antonio Multifamily | Winter 2018 12