The costs for five-star units can exceed $10,000 per month for penthouses at properties like 300 Main, pictured above.
San Antonio Express-News file photo
While San Antonio’s multifamily market continues to face high vacancy rates, one segment is bouncing back.
Luxury units make up nearly half of the local market’s inventory at 47%, and as of the second quarter, these four- and five-star apartments had vacancy rates below 12%, according to a recent CoStar report.
Article continues below this ad
In the early 2020s, both San Antonio and Austin experienced an influx of new apartment developments that outpaced demand and jacked up vacancies. Developers expanded the market by roughly 25% over five years.
RELATED: San Antonio overtakes Austin for highest apartment vacancy rate in U.S.
But construction has tapered off recently, helping stabilize rent prices and occupancy rates. With elevated construction and labor costs, skittish investors, higher interest rates and operating expenses, and still-high inventory, developers and investors are having a hard time justifying new multifamily housing projects of all kinds.
San Antonio Express News Logo
Make us a Preferred Source on Google to see more of us when you search.
Add Preferred Source
There are currently just more than 9,600 units under construction at 50 properties across the metro, according to a second-quarter report from data firm Austin Investor Interests. These conventional, affordable and build-to-rent properties will start trickling into the market over the next 12 months.
Article continues below this ad
San Antonio’s delivery cycle peaked in 2024, when approximately 10,200 conventional units were added. While it doesn’t seem like much of a difference, the pace of deliveries has fallen dramatically.
In the first quarter, San Antonio had an overall vacancy rate of 15.7%, the highest among the nation’s major markets, according to a previous CoStar report.
As the market stabilizes and absorbs its excess inventory, the luxury segment is leading the charge, attracting new tenants with concessions such as a free month of rent and other rent discounts.
“Now that deliveries are on the downward slope, you’re starting to see the absorption start catching up,” said Ryan Baldwin, executive director at San Antonio Apartment Association. “That’s going to happen first in the luxury market because they have operating reserves for lease-up, so they can afford to give these concessions and play with rents a bit to get the units filled. They have that reserve built in that others don’t have.”
Article continues below this ad
READ MORE: San Antonio renters are moving at one of the highest rates in the U.S.
Rents for four-star units currently average about $1,450 per month, while rents for five-star units average about $2,422 per month in San Antonio, according to CoStar. The top end for five-star units can exceed $10,000 per month for penthouses at properties such as 300 Main and Cellars at Pearl.
The average rent across the market is $1,250, down from $1,278 last year.
Luxury apartments near developments in highly concentrated areas like Pearl are filling up faster. Pearl has four complexes, including Cellars at Pearl, pictured above.
Cellars at Pearl
Location matters
Luxury apartments near developments in highly concentrated areas like Pearl and The Rim are generally filling up faster, “illustrating this flight to quality in the local multifamily market,” CoStar reported.
Article continues below this ad
MORE RENTAL NEWS: San Antonio apartment construction plunges as occupancy slips, rents soften
In the Pearl district, there are 901 luxury units across four complexes: Cellars at Pearl, Can Plant, Southline and Coopers Row. Oxbow Development, the developer behind Pearl, also is building a new eight-story complex at 1315 E. Elmira St., adding 300 more units to the area.
“Pearl is a very special, walkable, livable neighborhood,” Baldwin said. “It’s a social environment. You can live at Coopers Row, Can Plant or Cellars at Pearl, walk out your door every day and see hundreds of people. You don’t have to drive to the other side of town to go out and do things. That’s one of the many reasons those pockets are doing well.”
The Rim has even more, with roughly 2,415 units across seven properties, including Berkshire at the Rim, the Overlook at the Rim and Villas at the Rim.
Article continues below this ad
The Rim has more than 100 stores, restaurants and service businesses within the 2 million-square-foot open-air shopping center.
Big V Property Group
These properties are popular among renters because they offer built-in amenities outside their doors, with retail, restaurants, entertainment, hotels and other services at their fingertips.
“You don’t need a heavily amenitized property because your neighborhood is the amenity,” Baldwin said. “You can walk out your front door and enjoy the farmers market, a splash pad or a food hall.”
Competition heats up
Midrange and affordable apartments are still recovering from the construction boom, with vacancy rates of 18% in the second quarter, according to CoStar.
Article continues below this ad
These less expensive units are struggling to compete with the newer, shinier options that are floating out enticing deals to secure renters.
“Those properties are already a little bit more cash-tight right now because they have more operating expenses for maintenance, and it takes more money to market and advertise those properties because you have to find more creative ways to attract a resident sometimes,” Baldwin said.
SA INC.: Get the week’s top local business stories in your inbox
Discounts and concessions average 9.3% of market rent, equal to about $111 per month. Newer luxury properties in San Antonio are offering nearly 12%, according to Austin Investor Interests.
Article continues below this ad
Midrange and affordable apartments are trying to compete with their own range of discounts. In December 2025, CoStar reported that roughly 70% of apartments in San Antonio were offering concessions to attract residents. That was nearly double the national average of 37%, highlighting the intense competition among complexes.
“The biggest struggle for the lower segments of the market, whether it’s affordable or traditional midrange product, is that they’re having to give concessions that they’re not used to giving,” Baldwin said. “They’re struggling because they’re not underwritten to operate at lower occupancies.”
Looking ahead
As a plethora of luxury complexes race to fill units, many renters have jumped ship from older apartments to newer ones in the metro area.
Article continues below this ad
“Once the Class A market gets back on track where it should be, you will start seeing the other segments of the market start backfilling,” Baldwin said.
The market’s momentum picked up alongside strong wage gains, low unemployment and robust job growth last year. But as regional job growth slows and inflation-adjusted wages decline in 2026, these labor-market conditions could create significant obstacles for multifamily performance for the rest of the year.
Nevertheless, industry experts expect the latter half of the year to be a gradual recovery period, supported by fewer deliveries and improving absorption and occupancy.