Urban Genesis Launches its First BTR Project in San Antonio

A Houston developer is bringing its built-to-rent prowess to San Antonio, further igniting a trend in the Alamo City and much of the real estate world.

Urban Genesis recently started construction on Oasis at Stone Oak, a rental community with 284 homes in the city’s North Central neighborhood, the San Antonio Business Journal reported.

Built-to-rent developments are sprouting up all over Texas cities like Houston and Dallas, and now the Alamo City is joining the craze. The draw of rental communities is that they offer the perks of a single-family home — such as a yard, garage and a suburban lifestyle — without the costs and inconvenience of homeownership.

Urban Genesis, led by CEO Matt Shafiezadeh, just received a $46 million loan from U.S. Bank to help fund the project. The total estimated costs have not been disclosed, but Urban will finance the rest with equity capital. Connecticut-based Grandview Partners is a strategic partner for the project.

Oasis at Stone Oak will be developed in phases, with the first batch of homes slated for completion in 15 months. Three more phases will ensue, set to be completed in five-month increments.

The site will comprise a mix of floorplans: 40 percent one-bedrooms, 20 percent two-bedrooms and 40 percent three-bedrooms. Exact rental prices are still unknown, but they’ll likely be 20-40 percent less than the monthly cost of homeownership in the Stone Oak submarket. Shafiezadeh told the outlet.

This is Urban’s first build-to-rent project in San Antonio. Most of the firm’s holdings are in Houston, Austin and Dallas-Fort Worth.

As the BTR craze chugs along, developers are starting to face some challenges. They can be difficult to finance, and they’re susceptible to volatile market shifts, as rental prices can fluctuate greatly depending on market conditions, which could lead to high vacancy rates and low valuations.

However, current signs of weakness in the BTR realm are more of a reflection of the overall real estate environment, according to Shafiezadeh. The market is under stress amid high interest rates and other challenges, but Shafiezadeh is confident that the Stone Oak project will yield favorable results given the area’s demographic trends.

—Quinn Donoghue