Quo Vadis? San Antonio!
Written by: Joe Pendon
There are several reasons why San Antonio is a solid market for multifamily real estate. The key components of a solid real estate market include robust population and job growth within a diversified economy. San Antonio is unmistakably experiencing strong population and job growth. Over the past ten years, both parameters have exceeded the national average1. In 2017, San Antonio was first in the nation for population growth, gaining 24,200 residents2. This area of Texas is currently attracting multiple businesses and workers. Future projections for the corridor between San Antonio and Austin are also positive. It is anticipated that another 1 million Americans will become residents by the year 2030. The growth in population is fueled by strong employment and wage growth. Annual unemployment in San Antonio has been below the national average for the past 12 years4 while wage growth outpaced both Texas and the nation in 20185.
San Antonio is well known for tourism and the prominent military presence, but there is actually a very diverse economic base. As shown in the figure below, there are multiple industries which contribute to the overall San Antonio economy6. Examples include the Toyota manufacturing center, biomedical research activities of the UT Health Science Center, and large financial service companies such as USAA.
A significant presence of employers such as health care, higher education and government correlate with a strong real estate market. San Antonio is home to the South Texas Medical Center, a 900-acre complex of hospitals and medical offices which employ over 30,000 people7. The biomedical industry itself contributes $40 billion to the local economy8. There are also numerous institutions of higher learning in San Antonio, including the University of Texas at San Antonio (UTSA), Trinity University, St. Phillips College, St. Mary’s University and the University of the Incarnate Word. The largest of these is UTSA with an enrollment of 32,000, over 3,000 employees, and a local economic impact of $1.2 billion.
The military’s presence in San Antonio supports many jobs, both uniformed and civilian. Multiple large bases contribute to the local economy. These include Lackland Air Force Base, where all Air Force recruits begin basic training. Additionally, Brooke Army Medical Center at Fort Sam Houston is the largest military medical facility in the Department of Defense, employing over 8,000 workers and supporting multiple graduate medical education training programs. When the Base Realignment and Closure Commission shuttered bases in the past, local community planners resourcefully redeveloped them into job centers. Port San Antonio on the campus of the former Kelly Air Force Base is a 1900-acre aerospace, industrial complex and international logistics platform. It is the largest commercial industrial complex in the county and has the second largest concentration of cybersecurity experts in the nation. The former Brooks Air Force Base is now home to retail centers, DPT research laboratories, Mission Trail Baptist Hospital, and the Incarnate Word School of Osteopathic Medicine.
As the seventh largest city in the nation, San Antonio is a growing, vibrant city with a bright future. Texas’ large work force and business-friendly environment attract major employers to the city to further fuel their own growth and that of the local economy. As people and jobs continue to move to San Antonio, this creates a need for clean, affordable housing. The Alamo Area Metropolitan Planning Organization, for example, projects that 520,000 new housing units will be needed in the next 20 years8. There is without a doubt a strong demand for apartments and consequently an excellent opportunity for real estate investors.
1Bureau of Economic Analysis
2U.S. Census Bureau
3Texas Water Development Board
4Bureau of Labor Statistics
5Federal Reserve Bank of Dallas
6Texas Workforce Commission
7southtexasmed.com
8San Antonio Business Journal. “San Antonio’s academic medical center focuses on patient care and research while supporting the local economy” Jan 2, 2019.
9Alamo Area MPO