<\/p>\n
The costs for five-star units can exceed $10,000 per month for penthouses at properties like 300 Main, pictured above.<\/p>\n
San Antonio Express-News file photo<\/p>\n
While San Antonio\u2019s multifamily market continues to face high vacancy rates, one segment is bouncing back.<\/p>\n
<\/p>\n
Luxury units make up nearly half of the local market\u2019s inventory at 47%, and as of the second quarter, these four- and five-star apartments had vacancy rates below 12%, according to\u00a0a recent\u00a0CoStar report<\/a>.\u00a0<\/p>\n Article continues below this ad<\/p>\n 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.<\/p>\n RELATED: San Antonio overtakes Austin for highest apartment vacancy rate in U.S.<\/a><\/p>\n But construction has tapered off recently<\/a>, 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.\u00a0<\/p>\n San Antonio Express News Logo<\/p>\n Make us a Preferred Source on Google to see more of us when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n 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<\/a>. These conventional, affordable and build-to-rent properties will start trickling into the market over the next 12 months.<\/p>\n Article continues below this ad<\/p>\n San Antonio\u2019s 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.<\/p>\n In the first quarter, San Antonio had an overall vacancy rate of 15.7%, the highest among the nation\u2019s major markets<\/a>, according to a previous\u00a0CoStar report<\/a>.\u00a0<\/p>\n 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.\u00a0<\/p>\n \u201cNow that deliveries are on the downward slope, you\u2019re starting to see the absorption start catching up,\u201d said Ryan Baldwin, executive director at San Antonio Apartment Association<\/a>. \u201cThat\u2019s 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\u2019t have.\u201d<\/p>\n Article continues below this ad<\/p>\n READ MORE:\u00a0San Antonio renters are moving at one of the highest rates in the U.S.<\/a><\/p>\n 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,\u00a0according to CoStar. The top end for five-star units can exceed $10,000 per month for penthouses at properties such as 300 Main<\/a> and Cellars at Pearl<\/a>.<\/p>\n The average rent across the market is $1,250, down from $1,278 last year.\u00a0<\/p>\n Luxury apartments near developments in highly concentrated areas like Pearl are filling up faster. Pearl has four complexes, including Cellars at Pearl, pictured above.<\/p>\n Cellars at Pearl<\/p>\n Location matters\u00a0<\/p>\n Luxury apartments near developments in highly concentrated areas like Pearl and The Rim are generally filling up faster, \u201cillustrating this flight to quality in the local multifamily market,\u201d CoStar reported.\u00a0<\/p>\n Article continues below this ad<\/p>\n MORE RENTAL NEWS:\u00a0San Antonio apartment construction plunges as occupancy slips, rents soften<\/a><\/p>\n In the Pearl district, there are 901 luxury units across four complexes: Cellars at Pearl,\u00a0Can Plant<\/a>,\u00a0Southline<\/a> and Coopers Row<\/a>. Oxbow Development, the developer behind Pearl, also is building\u00a0a new eight-story complex<\/a> at 1315\u00a0E. Elmira St., adding 300 more units to the area.<\/p>\n \u201cPearl is a very special,\u00a0walkable, livable neighborhood,\u201d Baldwin said. \u201cIt\u2019s 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\u2019t have to drive to the other side of town to go out and do things. That\u2019s one of the many reasons those pockets are doing well.\u201d<\/p>\n The Rim has even more, with roughly 2,415 units across seven properties, including Berkshire at the Rim<\/a>, the Overlook at the Rim<\/a> and Villas at the Rim<\/a>.\u00a0<\/p>\n Article continues below this ad<\/p>\n The Rim has more than 100 stores, restaurants and service businesses within the 2 million-square-foot open-air shopping center.<\/p>\n Big V Property Group<\/p>\n 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.<\/p>\n \u201cYou don\u2019t need a heavily\u00a0amenitized property because your neighborhood is the amenity,\u201d Baldwin said. \u201cYou can walk out your front door and enjoy the farmers market, a splash pad or a food hall.\u201d<\/p>\n Competition heats up\u00a0<\/p>\n Midrange and affordable apartments are still recovering from the construction boom, with vacancy rates of 18% in the second quarter, according to\u00a0CoStar.<\/p>\n Article continues below this ad<\/p>\n These less expensive units are struggling to compete with the newer, shinier options that are floating out enticing deals to secure renters.\u00a0<\/p>\n \u201cThose 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,\u201d Baldwin said.\u00a0<\/p>\n SA INC.: Get the week\u2019s top local business stories in your inbox<\/a><\/p>\n 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.\u00a0<\/p>\n Article continues below this ad<\/p>\n Midrange and affordable apartments are trying to compete with their own range of discounts. In December 2025, CoStar reported <\/a>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.\u00a0<\/p>\n \u201cThe biggest struggle for the lower segments of the market, whether it\u2019s affordable or traditional midrange product, is that they\u2019re having to give concessions that they\u2019re not used to giving,\u201d Baldwin said. \u201cThey\u2019re struggling because they\u2019re not underwritten to operate at lower occupancies.\u201d<\/p>\n Looking ahead<\/p>\n 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.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cOnce the Class A market gets back on track where it should be, you will start seeing the other segments of the market start\u00a0backfilling,\u201d Baldwin said.\u00a0<\/p>\n<\/p>\n
<\/p>\n