Value-Add Multifamily Deals Buck San Antonio Slowdown

Multifamily deal flow has cooled off in San Antonio, but two recent acquisitions go against the grain.

CREE Capital bought Regatta Apartment Homes, a 200-unit apartment complex, at 12635 Scarsdale Street in Northern Hills. CREE, which pools money to buy value-add apartments, plans to upgrade community amenities.

The seller, Bluebonnet Asset Management, is an Austin-based investor. As part of the deal, CREE assumed the existing loan on the property. Assumable loans have helped make multifamily deals work at a time of high interest rates. Capital markets advisory Northmarq handled the sale and loan assumption process.

Built in 1982, Regatta is made up of 10 two-story buildings with one, two and three-bedroom apartments. The complex includes a pool, tennis court and walking trails near Northern Hills Lake and golf course.

In the second deal, Olson Capital acquired the Flats at 9338, an 88-unit apartment building at 9338 Perrin Beitel in Northeast San Antonio. Astoria Partners, an entity based in Lakeway and connected to investor Robert Walder, was the seller. Units average 850 square feet at the property, which was built in 1974.

Northmarq represented Astoria Partners in the deal.

Olson Capital is based in Laguna Beach, California. It was founded by brothers Obin and Amariah Olson, and targets value-add multifamily plays.

Apartment occupancy and rents have fallen in San Antonio as a glut of supply has entered the market. Alamo City apartments were 87 percent occupied at the end of last year, and rents declined slightly, a stark turnaround in what was one of the fastest-growing multifamily markets in the country until recently.

Developers built more than 10,000 units in San Antonio last year, and another 12,500 apartments are expected to come online in this year.