Austin
MULTIFAMILY
REPORT
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2024 | MID-YEAR
Annual Rent Change
Annual Inventory CHANGE
Deliveries & Absorption
Employment
Rent & Occupancy
Sales
Jobs Added / Lost*
LAST 12 MONTHS
28,500
2.1% YOY
Unemployment*
June 2024
3.4%
10 BPS YOY
Metro nonfarm employment expanded by 28,500 jobs over the past 12 months, equating to 2.1% growth. As the flurry of booming corporate expansions settle down in Greater Austin, the focus has shifted to building on sectors that support the needs of the metro’s expanding population, as Austin is the second fastest growing metropolitan area in the U.S. With 5,500 new positions gained in the last year, the leisure and hospitality sector led the metro in overall job growth, followed by 4,400 positions from private education and healthcare employers. On the leisure and hospitality front Austin restaurant openings increased 20% in 2023, higher than the U.S. average of 10%. Additionally, 1,400 new hotel rooms opened over the past year, mostly in outlying areas in South Austin and Georgetown/Round Rock. New entertainment venues such as the 20,000-seat Violet Crown Amphitheater near Bee Cave further solidified Austin as a major entertainment hub. New private medical facilities added to growth in the private education and healthcare sector, trending toward expanding care in areas that recent large population gains. In Williamson County alone, more than $685 million in hospital projects were announced in 2023. North Austin gained two new children’s hospitals in 2023, Texas Children’s Hospital and Dell Children’s Medical Center North. Upcoming projects near Round Rock include Ascension Seton’s $230 million expansion that will create 400 jobs and Baylor Scott & White’s $220 million expansion that will be complete in 2026. Both entities cite increased patient capacity for expanding.
EMPLOYMENT
ZT Systems' Georgetown campus expected to employ 1,500 people in 2024
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Ascension Seton Willamson Round Rock campus expansion to create 400 jobs
READ MORE
Texas Children's North Austin campus opens in 2024 bringing 1,500 new jobs
READ MORE
EMPLOYMENT TRENDS
IN THE NEWS
Austin’s multifamily developers have ramped up the volume of new deliveries each year since 2019. Austin led Texas in annual inventory growth at 7.8% with 23,114 units delivered through mid-2024. Nearly 14,800 of those units were delivered in the first half of 2024. With Austin among the top markets nationally for multifamily construction pipeline, it should be no surprise that the 36,585 units projected to come online during 2024 will set a record for the market. Increased renter appetite for apartments has incrementally closed the gap between supply and demand since 2022. Over the past year, renters leased almost 17,500 units, 71% or 12,392 occupied in the first half of 2024. This year could be the last year that net absorption is narrowly outpaced by new supply, with over 34,000 net move-ins in the forecast. Beginning in 2021, multifamily activity increasingly shifted to the metro’s suburbs and this trend is likely to continue through 2025, as these submarkets also contain the largest pipelines and high demand. Round Rock/Georgetown led all submarkets in year-to-date supply and net absorption with 2,954 units delivered and 2,799 net move-ins, followed by East Austin with 2,065 new units and 1,701 net move-ins, San Marcos with 1,924 new units and 1,517 net move-ins, North Central Austin with 1,684 new units and 1,355 net move-ins, and Cedar Park with 1,512 new units and 1,302 net move-ins.
Deliveries & Absorption
As two years of supply-side pressure continues, both occupancy and the average effective rent took a toll in the second quarter of 2024. Austin’s average occupancy rate dropped 120 basis points year over year as the average effective rent fell 6.9%. At 92.3% in the second quarter, Austin’s multifamily occupancy is on par with Texas’ other large multifamily markets. The state itself has an average occupancy rate of 92.7%. Occupancy losses were spread among all submarkets in the second quarter. Despite topping the charts for the volume of new units gained over the past year, East Austin and Cedar Park submarkets fared better than all other submarkets, besides Southwest Austin, with a decline of just 60 basis points annually. Projections show that occupancy will rebound as demand closes in on supply over the second half of the year, ultimately surpassing it in 2025. The average effective rent, at $1,533 per month in the second quarter 2024, is still the highest of all multifamily markets in the state. Even so, Austin was more affordable than the U.S. average of $1,828. This ensures that Austin will remain competitive and attract further net in-migration as it has successfully done over the past several years thanks to the metro’s comparative affordability matched with high quality of life. As 2024 progresses, the effective rent is projected to increase, ultimately reaching $1,582 by the fourth quarter.
RENT & OCCUPANCY
2024 Year to Date*
VOLUME
Nondisclosure
CAP RATE (AVG)
Nondisclosure
Price Per Unit (AVG)
Nondisclosure
TRANSACTIONS
6
WHAT’S TRADING?*
BUILDINGS (AVG)
15
ACRES (AVG)
22.72
YEAR BUILT (AVG)
2000s
UNITS (AVG)
365
Sources: MSCI Real Capital Analytics; CoStar Group; Berkadia Research
SALES
2024 YEAR TO DATE
DELIVERIES
14,750 UNITS
2024 TOTAL*
ABSORPTION
12,392 UNITS
DELIVERIES
34,585 UNITS
ABSORPTION
34,060 UNITS
Effective rent
Q2 2024
$1,553
6.9% YOY
OCCUPANCY
Q2 2024
92.3%
120 BPS YOY
*$50m+
SELLER
Transwestern (TDC) Paydar Properties Principal Asset Management Starlight Investments Blackstone
Houston, TX San Diego, CA Des Moines, IA Toronto, ON New York, NY
LOCATION
Buyer
WhyHotel Comunidad Realty Partners Azure Partners Mill Creek Residential Housing Authority of Austin
Washington, D.C. San Diego, CA New York, NY Boca Raton, FL Austin, TX
Location
Top Buyers*
Top Sellers*
BACK TO TOP
*Projected
Source: RealPage
Y- o-Y Effective Rent Change
( 1 1 . 5%) - ( 9. 8%)
( 9. 7%) - ( 8. 1 %)
( 8. 0 %) - ( 6. 5%)
( 6. 4%) - ( 4. 8%)
( 4. 7%) - ( 3. 2 %)
1. Arboretum
2. Cedar Park
3. Downtown / University
4. East Austin
5. Far South Austin
6. Far West Austin
7. Near North Austin
8. North Central Austin
9. Northwest Austin
10. Pflugerville / Wells Branch
11. Riverside
12. Round Rock / Georgetown
13. San Marcos
14. South Austin
15. Southeast Austin
16. Southwest Austin
SUBMARKET BOUNDARIES
Receding rents were present in all submarkets. The submarkets with the lowest negative effects had smaller lease renewal conversion percentages and lower rent reductions for new lease trade-outs compared to submarkets that posted larger annual rent reductions. This trend occurred without any correlation to recent inventory gains, geographic location, or demand levels. As with the year prior, San Marcos outperformed the other submarkets, with just a 3.2% annual reduction in effective rent to $1,363 per month in the second quarter of 2024. The Downtown/University submarket, which suffered the heaviest rent reduction during the year prior, locked in the second lowest annual rent reduction, at 3.8% which brought the average effective rent to $2,607 in the second quarter of 2024, the highest of all submarkets in the Austin metro. San Marcos’ new lease rate change was nearly -6.0% in the second quarter of 2024 and Downtown/University was -5.8% compared to the market average of -7.2%.
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
Annual Inventory Change
0 . 0 % - 3. 8%
3. 9% - 7. 7%
7. 8% - 1 1 . 5%
1 1 . 6% - 1 5. 4%
1 5. 5% - 1 9. 2 %
1. Arboretum
2. Cedar Park
3. Downtown / University
4. East Austin
5. Far South Austin
6. Far West Austin
7. Near North Austin
8. North Central Austin
9. Northwest Austin
10. Pflugerville / Wells Branch
11. Riverside
12. Round Rock / Georgetown
13. San Marcos
14. South Austin
15. Southeast Austin
16. Southwest Austin
SUBMARKET BOUNDARIES
In continuum with 2023, Round Rock/Georgetown led the market in annual inventory growth, with a 19.6% increase in the second quarter of 2024. Submarkets, Cedar Park, at 13.3%, and San Marcos, at 12.2% inventory growth annually, newly graced the leader board in the second quarter, rounding out the top three. The Round Rock area, which is neighbored by Cedar Park, has become a major center for economic development following Dell Technologies opened in the late 1990s. Lately, the area has benefitted from the semiconductor industry and proximity to the Samsung plant in Taylor, with companies like KoMiCo recently completing a $30 million expansion. The San Marcos submarket the center of what is slated to be the next big commercial and population growth zone along the I-35 corridor between Austin and San Antonio. Hays County has gained recent attention for record population growth and the announced, 1 million-square-foot Tesla expansion in Kyle.
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
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© 2024 Berkadia Real Estate Advisors LLC
Berkadia® is a trademark of Berkadia Proprietary Holding LLC Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This website is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales and realestate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx
The information contained in this flyer has been obtained from sources we believe to be reliable; however, we have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. While we do not doubt its accuracy, we have not verified it and neither we, nor the Owner, make any guarantee, warranty or representation of any kind or nature about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example and do not necessarily represent past, current or future performance of the property. You and your advisors should conduct a careful and independent investigation of the property to determine to your satisfaction the suitability of the property and the quality of itstenancy for your records.
EMPLOYMENT
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Under Construction/Lease-Up
Lease-Up
Under Construction / Lease-Up
Lease-Up
Deliveries
Absorption
Effective Rent Change
Source: RealPage
Source: RealPage
National Effective Rent
Austin vs. National Effective Rent & Occupancy
Austin Occupancy
SUBMARKET PERFORMANCE
Source: Moody’s Analytics
Source: RealPage
Riverside Round Rock/Georgetown San Marcos South Austin Southeast Austin Southwest Austin
90.6% 92.5% 92.0% 92.7% 91.5% 93.3%
-200 -120 -130 -140 -160 -60
$1,461 $1,484 $1,363 $1,891 $1,389 $1,680
-7.4% -6.8% -3.2% -6.2% -8.5% -8.3%
Arboretum Cedar Park Downtown/University East Austin Far South Austin Far West Austin Near North Austin North Central Austin Northwest Austin Pflugerville/Wells Branch
92.9% 93.2% 92.2% 91.7% 91.9% 91.6% 92.0% 92.4% 92.3% 92.5%
-80 -60 -100 -60 -150 -190 -170 -150 -80 -150
$1,404 $1,506 $2,607 $1,657 $1,459 $1,476 $1,539 $1,478 $1,482 $1,395
-8.4% -8.9% -3.8% -6.8% -6.7% -11.5% -7.9% -4.8% -7.4% -9.2%
Q2 2024 Occupancy
YOY (BPS)
Q2 2024 Effective Rent
YOY
1/2
2/2
ANNUAL INVENTORY CHANGE
DELIVERIES & ABSORPTION
EMPLOYMENT
ANNUAL RENT CHANGE
SALES
RENT & OCCUPANCY
SUBMARKET MID-YEAR 2024 ANNUAL RENT Change
SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change
Deliveries, Absorption, & effective rent change
Market Pipeline
Top submarket pipelines
Under Construction
Under Construction
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Unemployment Rate
Total Jobs
Austin Effective Rent
National Occupancy
Effective rent and occupancy reflect stabilized properties and does not include preleased units or properties in lease-up. A newly constructed property is considered stabilized once it becomes 85% occupied.
*Seasonally Adjusted
