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SAN ANTONIO, TEXAS (February 21, 2023) – Bryan Leonard, managing director – debt/equity, and Zar Haro, managing director – multifamily investment sales, of Northmarq’s San Antonio office recently spoke with Texas Multifamily & Affordable Housing Business in a story titled, “Investors Bank on San Antonio’s Economic Growth.” While the rest of the world seems to be bracing for a possible recession, San Antonio investors remain bullish, as long as they are ready to play the long game. As a young city with a growing job market and population, demand for apartments is high, especially in the context of being more affordable than neighboring Austin.
“The most active submarket concentrations are the Far West side of San Antonio, Northwest San Antonio and I-35 corridor markets like New Braunfels,” said Leonard. He noted that while the pipeline may be flush with future projects, new communities are still needed in San Antonio.
Haro pointed-out that most of the area’s multifamily inventory was built between 1970 and 1989, with a garden-style build. “This asset type is the most liquid due to the current value-add component and a receptive renter market that can’t afford new construction rents but still prefers a modern finish-out seen in renovated units,” he said.
Other topics covered include:
SAN ANTONIO, TEXAS (January 10, 2023) — Northmarq’s San Antonio investment sales office recently expanded by welcoming Brian Booth as senior associate. Booth will be responsible for sourcing and transacting multifamily investment sales in Central and South Texas. In his role as senior associate, he will work alongside the brokerage team to steward client assets. Additionally, Booth will coordinate with the two debt and equity experts also in the San Antonio office.
Prior to Northmarq, Booth served at Cushman & Wakefield in Orange County, California for over a decade, specializing in the representation of corporate occupier clients and the leasing and sales of office, industrial buildings, and land on behalf of local and institutional investors and developers. Over the past 11 years he has been instrumental in the execution of over $1 billion of leasing and sales transaction value for his clients. Booth is an expert in helping clients navigate and execute complex transactions across a wide range of industries.
“Booth has an extraordinary business development acumen and networking capability. We are excited to use our existing relationships and keep growing, it’s not everyday someone with his capabilities walks in the door. We’re thrilled to expand our market share together,” said Haro.
Booth served as president of the Orange County Chapter of Cushman & Wakefield’s Future Leaders (CWFL), a group within the firm that helps accelerate the advancement of rising professionals through continuing education, collaboration, communication, and community service. In 2020 he completed the prestigious Young Professionals Group (YPG) program through Southern California’s NAIOP (National Association of Industrial and Office Properties). He has served on NAIOP’s Fight Night Planning Committee from 2020-2022, the real estate organization’s signature annual networking event.
Booth has also served as a Board Member on the Mission Forward Junior Board of St. Joseph Health, an organization created with the goal of improving the health of the local community. His efforts as a Board Member supported mental health initiatives and programs for children and teens in Orange County.
Booth attained a Bachelor of Arts degree from Chapman University as well as a professional degree in Real Estate Finance, Investment, and Development from the University of San Diego.
SAN ANTONIO, TEXAS (January 5, 2023) – In spite of stellar property fundamentals remaining, both industrial developers and lenders are looking to play it safe on new construction, according to Wealth Management Magazine. In a story titled “Pullback On Construction Lending Likely to Cut Back Industrial Pipeline in 2023” the publication notes that the rapidly rising cost of capital in the commercial real estate industry will most likely reduce U.S. industrial starts to a seven-year low in 2023. This is likely to occur, despite a projected 10 percent growth in industrial rents.
Even with solid property fundamentals, the increased cost of debt and equity, along with ongoing discovery for land and asset prices, has made both industrial developers and lenders more cautious. Less well-capitalized developers, such as those specializing smaller, speculative projects, or those with focusing on tertiary sites face the biggest hurdles.
Northmarq’s Bryan Leonard noted in the article that “while industrial construction is expected to level off in 2023, this was a banner year for both industrial construction starts and deliveries.” He went on to add that high demand for space is keeping rental rates rising, which should provide developers some offset to higher interest rates.
Other topics covered include:
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SAN ANTONIO, TEXAS (September 30, 2021) – San Antonio’s rebounding economic drivers, growing population, robust renter demand and impressive rent growth are making the market a top pick for multifamily investors.
San Antonio’s booming target industries include the red-hot cybersecurity and information technology, life sciences and healthcare – key drivers for employment growth. Industrial and logistics, energy and banking also remain strong industries.
“We’ve seen a 10 percent year-over-year employment leap in higher-paying, white-collar jobs,” says Zar Haro, managing director of investment sales for NorthMarq’s San Antonio office.
San Antonio, in particular, is a top U.S. hub for cybersecurity, driving a robust economic recovery. Cybersecurity will continue to benefit from the expansion of the downtown campus of the University of Texas, ranked the nation’s top university for studying cybersecurity.
“San Antonio has always had strong anchor employers, and lenders looked to us for stability,” notes Bryan Leonard, managing director of debt and equity for NorthMarq’s San Antonio office. “However, these new industries driving the economy aren’t just providing good jobs, they’re fueling net migration and population growth, which is creating demand for housing.”
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San Antonio is one of the fastest-growing cities and attracts young people with its employment opportunities and affordability. Also, the surging single-family housing market triggered tight inventory and steep pricing, driving more people to rent.
To meet demand, apartment development has accelerated. “In the last 12 months, roughly 5,200 units were delivered, and the market absorbed 10,700 units – doubling demand,” Haro notes. Rent growth jumped an unprecedented 11 percent from 2020 to 2021.
These solid market fundamentals are boosting investment activity. “On the capital markets side, we’re as busy as ever,” Haro notes.
Transaction volume increased nearly 30 percent in the second quarter, and pricing rose 30 percent over 2020. Pricing trended between $83,000 and $115,000 per unit over the past decade. In the last year, 160 buildings traded at roughly $117,000 per unit. In the second quarter alone, trades were approximately $130,000 per unit. Haro says transactions totaled between $700 million and $800 million in the second quarter, nearly matching the total for all of 2019. “That kind of demand is pretty wild,” Haro adds.
Cap rate compression continues; it’s 4 percent to 4.5 compared to 5 percent to 5.5 percent in 2020.
Investors are flocking to the market. While it’s primarily private capital, more institutional players have mandates to increase their presence here.
Many lenders identified San Antonio as a preferred market. Approximately $2.3 billion in transactions were financed in 2020. “Eighty-five percent was by government agencies: 65 percent was Freddie Mac and Fannie Mae and 20 percent HUD. The remaining slivers were banks, insurance companies, and bridge or debt fund lenders,” Leonard notes.
With surging rent growth and demand, San Antonio is already at approximately $2.2 billion in financing volume and on track to finish roughly 25 percent higher than 2020. However, the composition of lenders is only 50 percent Freddie and Fannie, Leonard notes.
“So banks and bridge lenders have stepped in due to the rent growth and to support value-add acquisitions,” says Leonard.
Also, insurance companies are very interested in San Antonio and extremely competitive on low-leverage deals.
An abundance of capital remains available. “From the lending perspective, no one is turning off the faucet,” says Leonard.
A large supply of properties will become available, and rents will continue to grow very quickly, adds Haro. Cap rates will remain challenging, but investors are willing to take a less-than-ideal cap rate in exchange for hefty rent growth potential.
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SAN ANTONIO, TEXAS (April 5, 2021) — Zar Haro, managing director of NorthMarq’s San Antonio office was recognized as one of San Antonio Business Journal’s 40 Under 40. The award is presented to professionals under 40 years old who have demonstrated excellence in business, leadership and community involvement during the last 12 months. Haro and the other winners were recognised at a virtual event on March 25, as well as featured in the San Antonio Business Journal.
Haro and is team are responsible for investment sales and capitalizations in Central and South Texas. In his nearly 15 years of experience, Haro has personally closed more than 300 multifamily investment sales and capitalizations.
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SAN ANTONIO, TEXAS (MARCH 17, 2021) — NorthMarq’s San Antonio multifamily investment sales team was named in two categories of CoStar’s Power Broker Awards. Zar Haro, managing director, and Moses Siller, managing director, were two of the six individuals from three different companies chosen as “Top Sales Brokers.” NorthMarq was also recognized as a “Top Sales Firm,” along with four other leading sales firms.
The CoStar Power Broker Awards recognize and celebrate commercial real estate’s top brokers and firms in the United States and Canada. Each year CRE professionals have the opportunity to submit their closed sale and lease transactions to be considered toward the Annual Power Broker Award. CoStar then verifies and analyzes thousands of deals submitted to identify winners in each market (based on cumulative deals; SF and PSF). Read more information on the methodology for determining winners of CoStar’s Power Broker Awards.
MINNEAPOLIS, MINNESOTA (December 22, 2020) — Community Housing Resource Partners has received a 2020 Community Involvement Grant from NorthMarq’s San Antonio office. The organization is dedicated to creating quality affordable housing where built-in social services empower low-income residents to reach independence and stability.
Founded by the Rev. Jerry Kalb in 1992, the organization began as a community effort to revitalize a residential property in the heart of Painesville, Ohio. In the 25 years since its founding, the organization has extended its outreach to San Antonio (the first property built in 2007) and Arizona (first property built in 2014) and recently celebrated its 25th anniversary in 2018.
“CHR Partners is one of the preeminent non-profit housing organizations in the city of San Antonio. As a borrower of Fannie Mae, Freddie Mac and FHA/HUD, the organization partners with many of our clients, and fits perfectly with the NorthMarq’s diversity initiatives and mission,” said Bryan Leonard, managing director – debt & equity.
“Many of our families have really struggled this year during the pandemic, and this donation will go a long way in helping us provide for their basic needs,” said Executive Director Constance Cooper.
In the third year of NorthMarq’s Community Involvement Grant program, the company has awarded grants to 18 non-profits in 16 cities. The program solicits nominations from each local office, and had an increase of 20 percent from 2019, with a total of 18 non-profits focused on affordable housing and reducing homelessness receiving these grants in 2020. NorthMarq’s 2020 grant to New Hope Housing represents its third award under the Community Involvement Grant program.
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Zar Haro, investment sales managing director of NorthMarq’s San Antonio office, was a featured speaker on Tuesday, September 29 for the Peak Market Watch webinar titled: “Why Secondary & Tertiary Markets Make It Easy To Achieve Double-Digit Returns for Multifamily Investors.” The hour-long event began at 11 A.M.
During the event, Haro explained what he is currently seeing with San Antonio, Corpus Christi, and Rio Grande Valley markets. Haro also broke down commercial property performances despite COVID-19 and the oil/gas slow down, how buyer interests are changing, impacts he is seeing from the changes in lending, as well as why secondary & tertiary markets make it easy for multifamily real estate investors to achieve double-digit returns!
Haro joined Anton Mattli – Peak Market Watch Show Host and Abel Pacheco – Peak Market Watch Show Co-Host for the conversation. Event details can be found here.
SAN ANTONIO, TEXAS (July 25, 2020) – NorthMarq’s San Antonio office added to its Investment Sales team by bringing on brokers Bryan VanCura and Phil Grafe. As multifamily specialists, Bryan and Phil will be responsible for selling apartment buildings in Central and South Texas. VanCura will have specific focus on the San Antonio MSA, while Grafe will focus on Texas secondary and tertiary markets, including, Corpus Christi, the Rio Grande Valley, Waco, Temple, and Killeen. They will report to Managing Directors Zar Haro and Moses Siller, who joined NorthMarq last month.
“Bryan and Phil joining the team will be an immediate win-win. Their experience in San Antonio and Texas secondary markets will complement the robust client base Zar and I have already in the region. Adding two seasoned professionals will enable our office to hit the ground running, and cover more ground in the process,” said Siller.
Prior to joining NorthMarq, VanCura was an Associate for an affiliate Cushman & Wakefield office selling multifamily locally. Prior to brokerage, he worked for a non-profit, launching its presence in San Juan, Puerto Rico, and then serving as an area director in San Antonio.
A few of VanCura’s transactions:
Prior to joining NorthMarq, Grafe worked on the JLL Capital Markets team specializing in multifamily. Phil was instrumental in working on advising clients on over 160 assets across San Antonio and Texas Secondary Markets.
A few of Grafe’s transactions:
MINNEAPOLIS (June 9, 2020) — NorthMarq extended its multifamily investment sales depth in Texas with the addition of Moses Siller and Zar Haro as managing directors-Investment Sales in San Antonio. They will collaborate with NorthMarq’s Texas offices in Austin, Dallas, and Houston, to market multifamily assets and help clients identity the best financing structure. Last month, Scott Lamontagne joined NorthMarq as managing director – Investment Sales in Austin; the Texas multifamily investment sales platform also includes an eight-person team in Dallas led by Taylor Snoddy.
Siller and Haro previously worked for JLL’s Texas Multifamily group and provided a full suite of capital solutions, including research, advisory, transactional, debt structures, and equity sourcing, to private and institutional apartment owners and developers. The team has a long track record of investment sales business and capitalization, completing more than 300 transactions totaling $3.5 billion.
Trevor Koskovich, president-Investment Sales, leads the multifamily investment sales platform’s growth, and looks for professionals who are interested in leveraging the company’s entrepreneurial culture and debt and equity expertise. “Moses and Zar complement our other investment sales leaders in Austin and Dallas, and provide a perfect fit to NorthMarq’s culture of entrepreneurship and innovation,” he said. “I am excited to have such a great team join us as we build our investment sales platform across the country.”
Siller comes to NorthMarq after six years of multifamily investment sales with JLL, where he handled value-add and Class-A transactions. He also worked for Marcus and Millichap, where he started his brokerage career as an adviser with the Institutional Property Advisors group. In his nearly 15 years of experience, Haro worked for JLL as an executive vice president, in investment sales at Marcus & Millichap and as commercial debt and equity advisor at Meridian Capital, LLC in New York City.
Their recent transaction history includes:
Siller and Haro will join the NorthMarq San Antonio office located at 70 N.E. Loop 410, Suite 285, and collaborate with Bryan Leonard, managing director – debt and equity in San Antonio, along with the debt and equity experts from Austin, Dallas, and Houston.
Bryan Leonard, senior vice president/managing director of NorthMarq’s San Antonio office, joined Laurie Griffith, executive vice president of Texas Capital Bank San Antonio, for a webinar hosted by The Real Estate Council of San Antonio. Carrie Caesar, Cushman & Wakefield San Antonio senior director – Capital Markets – Private Capital Group, moderated the program.
The session, titled “San Antonio CRE Lending Update,” covered such topics as the “Economy at a Glance,” “What Lenders Are Active Locally,” “Local Property Types In and Out of Favor,” and “Interest Rate Indications for San Antonio.”
Bryan Leonard joined four other NorthMarq Capital producers to discuss and answer questions regarding tertiary and secondary markets. He noted in his remarks “We expect that San Antonio will remain a dynamic and attractive investment market across the property type spectrum for both investors and lenders alike for reasons that have always held true—steady, measured growth absent of volatile peaks and valleys.” Read Bryan’s responses below.
1. What property type/niche are seeing/hearing about in your market? What conditions make this possible?
San Antonio has long been characterized as a very stable market and for good reasons. It has a diverse economic base, perceived high quality of life and a very reasonable cost of living. It was named as the number two place to visit in the world on a recent list published by Budget Travel and consistently ranks in the top 15 of US event destinations. Many people don’t realize it is the seventh largest city in the country. In recent years, the San Antonio CBD has largely been a tourist destination but that is no longer the case. San Antonio’s CBD is undergoing a residential and commercial renaissance. For the first time since 1989, a new $142 million 460,000 sq. ft. office tower designed by the world renowned Pelli Clark Pelli architecture firm is under construction in the CBD. Numerous multifamily and entertainment venues have also been and are currently under development. Additionally, the suburbs are doing well and seeing a mix of office, retail and multifamily construction as one would expect given San Antonio was ranked sixth in population growth in the US among big metros last year. Housing starts continue to be solid and demand is outpacing supply with an estimated 3.4 months of inventory available according to local sources. We have seen many people relocating to San Antonio from other parts of the state and nation for work in recent years. These factors support healthy real estate markets locally in the broad sense. There does seem to be a niche in the affordable/workforce housing space in this market and several developers and local municipalities have capitalized on those opportunities. San Antonio is also a good hotel market given its strong position in the tourism industry.
2. What type of borrowers/lenders are in your market? For example; is it primarily agency or are bank and life companies also part of the mix? Why?
Borrower profiles in our market range from local to national, international and institutional. We do have quite a bit of interest and investment from investors located in California as well as the northeastern and southeastern part of the country. In the last several years, wealthy families with diverse business interests from Mexico have been significant real estate investors in San Antonio. It is a great relative value market when compared to the gateway markets as competition for product can translate into very thin investment returns. The San Antonio market offers investors stability with upside potential and real estate is still priced quite reasonably. NorthMarq is active with all lender types including life companies, agencies, CMBS, banks and other balance sheet type lenders in San Antonio. I would summarize by observing that San Antonio enjoys very good capital liquidity when it comes to the commercial and multifamily real estate markets and there is robust interest in investing here from a wide variety of investor types.
3. What are the unique challenges facing your market?
Like many metropolitan areas experiencing strong growth, San Antonio is working to insure highway infrastructure keeps up with increased population and traffic. Our airport is undergoing an expansion with modernization. More frequent direct flights to key destinations will be important to future growth as well as the continued strong performance in the convention and tourism business. Our convention center is state-of-the-art and San Antonio is focused on continuing to be a leader in that very competitive industry. Like any growing city, strong pro-growth leadership will be necessary to perpetuate economic growth. We are fortunate to have a strong city manager as the city is in very good financial health and maintains excellent bond ratings. San Antonio is somewhat unique in that our water supply is derived from underground resources as opposed to surface resources. Long term plans to address and guarantee that resources will be plentiful for future generations are also in place and new avenues to supplement that plan are constantly being evaluated and implemented.
4. What are the unique opportunities present in your market?
San Antonio has a unique combination of resources and geography that contribute to its desirability. It has a culture unique to South Texas and a perceived high quality of life. As previously mentioned, the cost of living is low relative to many other places and weather is favorable in that winters are generally mild, making outdoor recreation very accessible just about year around. The economy is based on a diverse mix of industries such as tourism, import/export, manufacturing, healthcare and bioscience, aerospace, financial services and military. San Antonio is home to mission critical military bases and other governmental operations and is the epicenter of the burgeoning cybersecurity field. Due to the low cost of power and general lack of significant weather events, large data centers have located in San Antonio. For example, Microsoft recently purchased land to build a $1 billion facility that is in addition to two data centers they already occupy in San Antonio. We expect that San Antonio will remain a dynamic and attractive investment market across the property type spectrum for both investors and lenders alike for reasons that seem to have always held true here- steady, measured growth absent of volatile peaks and valleys.
