3 min read October 2023 — Embrey is looking at its future with a lot of optimism. “We are looking forward to many more years of delivering strong returns for our capital partners while positively impacting the communities in which we operate,” says Chief Investment Officer Garrett Karam.
What is your company’s main contribution to the San Antonio region’s growth?
We contribute to the growth of San Antonio in several impactful ways. The first is that we develop marquee projects that contribute meaningfully to the built environment. Our new corporate headquarters at 7600 Broadway is a good example. It combines office and residential uses in a beautifully designed building and replaces buildings on a major intersection that were nearing the end of their useful life. Secondly, we support many organizations that help promote growth, whether it be the Embrey Real Estate Finance and Development Program at UTSA, greater:SATX Regional Economic Partnership, or the many other civic organizations we are involved with. We are focused on providing value to the community and creating growth opportunities for the city as a whole.
Lastly, we deliver well-designed rental housing projects that our company will be proud of for years to come. With all the new residents moving to our region, the need for new, high-quality housing cannot be overstated.
What are the main challenges the company and construction industry are facing?
The biggest long-term challenge we face is attracting talented team members, and that is a constraint across our organization. The city should continue investing in education, infrastructure and civic projects that will attract a more talented workforce to our region over time. When it comes to construction, there simply aren’t enough skilled tradespeople to keep up with the growth demands of the industry. Investing in training and promoting the career path will help alleviate this challenge over time.
Over the short term, the capital markets environment is our main challenge. The lenders in our space have significantly reduced the amount of capital available for both acquisitions and new developments and the current economic uncertainty will make it hard to start new projects in 2024. Unfortunately, this is going to create an even deeper shortfall of housing, which will create even more upward pressure on housing costs.
How is Embrey addressing attainable housing?
We will continue to acquire and rehab existing apartment buildings. We can ordinarily deliver these units to the market at a more affordable rate than new construction while also providing the finishes, amenities, and high-quality management that our residents deserve.
We are also creating an attainable housing platform that will allow us to deliver new apartment projects at more affordable rates. We are looking forward to starting our first development on this platform soon.
Lastly, we are proponents of continuing state and city sponsored programs that promote rental housing development through incentives and tax abatements. Ultimately, more housing leads to lower housing costs. The state and city need to play a key role in this equation. Remember that a big reason Texas has been such a growth story since the 2008-2010 recession is that we are a more affordable option to relocate than many other regions; we must keep this competitive advantage if we expect continued success.
How do you see sustainability in your industry?
We’re very proud of our environmental track record. We actively look for ways to exceed energy and water usage standards and are often able to utilize reused or recycled materials in our building process.
We believe that it is everyone’s responsibility to take active steps to mitigate climate change. It is more evident every year that the environment is impacting both business and quality of life. We see it throughout our markets, whether it be lack of water availability for new development in Phoenix, insurance rates in Florida, or this summer’s heatwave in Texas. We need to work collectively on this issue and Embrey will continue to do our part.
What is your outlook for the next three to four years?
When you look at the three-plus-year horizon, we see an incredible amount of opportunity for Embrey. There’s a fundamental shortfall of housing in the Sun Belt and in the U.S., likely more than 4 million units and growing. The fact is that we need more housing, and our company has the experience and ability to deliver quality rental housing at scale. We are looking forward to many more years of delivering strong returns for our capital partners while positively impacting the communities in which we operate.
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