Category: Central/South Texas

Walker & Dunlop, Ivanhoe Cambridge Form Equity Partnership

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The joint venture has made its first two investments in Texas and Tennessee.

Walker & Dunlop Investment Partners and Ivanhoé Cambridge, which formed a joint venture to make preferred equity investments in multifamily, student housing and manufactured housing properties, have made their first two investments totaling nearly $10 million in Texas and Tennessee.

Executives at both firms said they would be focusing primarily on properties in the top 25 MSAs, particularly in the Southeast, South and Southwest. The first transaction was an approximately $4 million preferred equity investment into a joint venture with Pegasus Real Estate to acquire Collection at Overlook, now rebranded as Cornerstone at Overlook, in San Antonio, Texas.

The 240-unit multifamily property was constructed in the 1980s and is located near a medical center in the city’s northwest section. The second transaction was a $5.6 million preferred equity investment into a joint venture with Valor Residential to acquire Overlook at Farragut, a recently delivered 267-unit multifamily property in the Farragut submarket of Knoxville, Tenn. Click to read more at www.multihousingnews.com.

KKR Agrees to Sell Riata Corporate Park in Austin, Texas

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KKR, a leading global investment firm, today announced that KKR has agreed to sell Riata Corporate Park (“Riata”) to a global institutional investor in a deal valued at over $300 million. The transaction is anticipated to close in the coming months.

Riata Corporate Park is an eight building, 688,100 square foot, Class A office campus located in the Austin Technology Corridor in Northwest Austin, Texas. The campus is well located just minutes from The Domain, Austin’s premiere mixed-used retail and entertainment hub. The property is 100% leased and occupied by a high-quality tenant group that includes publicly traded companies along with a mix of technology, financial services and healthcare businesses.

Since purchasing Riata in December 2019 through its Americas opportunistic real estate strategy together with Endeavor Real Estate Group (“Endeavor”), KKR has substantially upgraded the property’s fitness center, café, landscaping, outdoor amenities and other features. KKR and Endeavour also completed significant deferred maintenance.

“Our long-term focus on high-quality properties in great locations within attractive growth markets led us to invest in Riata, a tech-focused office campus in one of the country’s most desirable cities,” said Roger Morales, KKR Partner and Head of Real Estate Acquisitions. “We are proud of the property and capital improvements delivered under our ownership in what has been a very successful pre-pandemic office investment. Click to read more at www.valdostadailytimes.com.

More Than 800 apartments et to Land in East Austin on Manor Road

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A mixed-use complex featuring more than 800 apartments is in the works along Manor Road in East Austin.

Austin-based real estate developer Cumby Group announced August 24 that it plans to build three adjacent projects comprising more than 800 apartments, along with 150,000 square feet of live-work and business space. The projects will sit on nearly 9 acres between Airport Boulevard and the Mueller development.

Work is already underway on The Emma, a five-story, art-deco-style building at 3219 Manor Rd. providing 146 apartments. Amenities will include a live-work space on the ground floor and an elevated courtyard pool. The Emma is scheduled to open next summer.

Next door at 3115 Manor Rd., Cumby Group plans to build a couple of five-story, mixed-use buildings offering a total of 450 to 500 apartments. Amenities will include live-work and business space, as well as a neighborhood spot that may include food trucks, a makers market, and a farmers market. Construction is scheduled to start in the spring of 2022.

The third project, at 3303 Manor Rd., tentatively will supply about 200 apartments, along with an area for food trucks. Click to read more at www.austin.culturemap.com.

Churchill Forge Expands San Antonio Footprint

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Churchill Forge Properties has acquired Celeste at La Cantera, a 300-unit Class A community in San Antonio from USAA Real Estate. Institutional Property Advisors closed the transaction on behalf of the seller.

Completed in 2018, Celeste at La Cantera is a four- and five-story building occupying 6.2 acres at 6107 Via La Cantera. The property has one- to three-bedroom apartments and one penthouse unit. Floorplans range from 558 to 1,906 square feet. Amenities include a swimming pool, a gym, a clubhouse and roughly 450 parking spaces.

The community is next to Brookfield Properties’ 1.2 million-square-foot The Shops at La Cantera, 1 mile from the University of Texas at San Antonio and 15 miles northwest of downtown.

The deal marks the second major Texas acquisition Churchill Forge has closed so far this year. In January, the Boston investor purchased a 320-unit Class A property in Austin, Yardi Matrix shows. State Farm provided $35.8 million in acquisition financing. Click to read more at www.multihousingnews.com.

San Antonio Office Monthly Market Snapshot August 2021

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San Antonio Office absorption at highest January through July aggregate total since 2017.

Market Highlights

VACANCY RATE INCREASES TO 11.1%
The overall vacancy rate in the San Antonio office market is at 11.1%, up 60 basis points from this time last year at 10.5%. The vacancy rate for Class A properties is at 14.1%, up from 13.0% in the prior period. Net absorption (move-ins minus move-outs) of positive 290,000 sq. ft. was up from negative 85,000 sq. ft. at this time in 2020. In addition, six properties with a combined total of 619,000 sq. ft. of new supply has been delivered to the market so far in 2021, with an occupancy rate of 54%. Year-to-date through July, the office market has recorded 1.2 million sq. ft. of leasing activity—which is comprised of both new leases and renewals—down 60% from one year ago.

PROPOSED MIXED-USE THAT COULD INCLUDE OFFICE SPACE
Members of the Black family, which operate Terry Black’s Barbecue in Austin and Dallas, have purchased a mostly vacant 1.4-acre site—roughly a city block of land, a few blocks north of the successful Pearl development. The property is located at 2110 Broadway and will possibly be developed into a combination of San Antonio office space, multifamily, a hotel and restaurant. It is a prime spot near downtown business, the Alamo Heights neighborhood, and proximity to the Pearl.

SAN ANTONIO LABOR MARKET
The metro’s unemployment rate dropped in June to 5.5%, the lowest since March 2020. The state’s jobless rate fell slightly to 6.5%, and the nation’s rate ticked up to 5.9%. Net payrolls grew in the second quarter, with leisure and hospitality leading growth (15.1%, or 4,190 jobs) followed by government (8.8%, or 3,650 jobs). In March and April 2020 combined, 130,511 jobs were lost due to the pandemic. As of June 2021, 83.3% of those jobs had been recovered. Click to read more at www.naipartners.com.

Construction Begins on 17-Story Fairfield Inn & Suites in Austin

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General contractor Arch-Con® Corporation is underway constructing a 17-story Fairfield Inn & Suites located at 76 East Avenue near Downtown Austin and Interstate 35 in the popular Rainey Street District.

“This isn’t your typical Fairfield Inn & Suites,” Arch-Con Senior Vice President Marc MacConnell who leads the company’s Central Texas Region said. Arch-Con, headquartered in Houston, opened an office in Downtown Austin earlier this year to serve the area’s growing market. “This high-rise suite hotel is in a popular, walkable location and will offer views of Downtown Austin, a rooftop terrace and balconies to enjoy the city.”

Developed by RGB Hospitality and designed by MCS Architects, LLC, The Fairfield Inn & Suites will have 126 rooms and suites and feature a large lobby, lounge, dining area and pantry market for grab-and-go conveniences. The top three floors of the hotel will house an outdoor rooftop terrace, fitness room, pool and spa, multi-purpose room, presidential suite and sweeping views of Austin for an added layer of luxury to this Marriott-brand hotel. Several guest rooms also come equipped with outdoor balconies. Exterior lighting will illuminate the hotel and amenity deck. A six-level, 57,930-square-foot concrete parking garage provides parking for its guests.

The building is constructed of cast-in-place concrete on piers with exterior finishes that include a combination of EIFS, metal paneling and glass. The hotel is on a tight site with the Homewood Suites just 11 inches from the project site line and, therefore, Arch-Con has worked with neighbors and our safety team for optimal laydown and safe construction practices.

Arch-Con has built more than a million square feet of hotel rooms for nearly every major hotel brand. This project will rise in height to 192 feet and use a specific tower crane that will increase from 10-stories to 19-stories as the building height progresses. “This type of crane that stacks itself, or rises in height, is simply more economical and practical due to the tight site,” MacConnell said.

A focal point for the high-rise hotel juxtaposing the bungalow bars and restaurants that line Rainey Street is a mature, majestic tree on the property of which the entire project team, as well as an arborist, are taking great care and attention. The tree will frame the entrance of the hotel in keeping with the charm of the area.

The Fairfield Inn & Suites plans to open late 2022, increasing the walkable hotel options for Austin and this vibrant neighborhood.