California company buying apartments near The Rim continues trend

SAN ANTONIO — A California real estate investment firm has purchased a luxury apartment complex in Éilan near The Rim, part of a recent wave of multi-family acquisitions by out-of-town investors.

So far this year, more than 70% of buyers in sales tracked by Austin Investor Interests LLC have come from the east and west coasts, said founder Robin Davis.

Local complex occupancy and rents have reached historic highs over the past 15 months.

“The rental market is up,” Davis said. “It sparked investor interest because San Antonio was speculated to be the next boom town.”

But the market has recently started to cool down.

“Occupancy is slowing now, new stocks are increasing, and immigration is decreasing,” Davis said.

But in the latest notable acquisition, an affiliate of San Diego’s Interwest Capital Group purchased the 539-unit Arrive Éilan complex from San Francisco-based FPA Multifamily in late September, according to the deeds.

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It’s unclear what Interwest paid for the 17.2-acre property at 17101 La Cantera Parkway, which the Bexar Assessment District values ​​at $123 million.

The complex appears to have been renamed Paseo Residences in Éilan, and rents for available units range from $1,210 to $2,500 per month, according to its website.

The resort’s occupancy rate was not immediately known, and it was unclear whether Interwest’s purchase included commercial suites in Éilan.

The 120-acre community includes apartments, offices, restaurants, shops and a hotel around a plaza. Its Tuscan-style design features multicolored stucco exteriors, stone facades, and clay tile roofs.

Interwest did not respond to an inquiry.

The company is “focused on acquiring underperforming real estate investments and distressed debt,” buying properties with potential and turning them into “prime assets,” according to its website.

Interwest’s portfolio includes apartments in Nevada, Wisconsin, Florida, California, Texas, Ohio and Arizona, as well as hotels.

In recent years, multi-family investors have been attracted by San Antonio’s strong job market, relatively stable economy, and booming population.

There were 85 sales in the first half of 2022, compared to 54 sales in the same period in 2021, according to Austin Investor Interests LLC.

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Apartments around The Rim at Interstate 10 and Loop 1604 have attracted attention due to their proximity to shops, employers’ restaurants and offices.

Last year, Bethesda-based Aldon bought the 310-unit Infinity at the Rim Complex for $73 million and Boston-based Berkshire Residential Investments bought the 384-unit Berkshire at the Rim Complex for an undisclosed price. disclosed.

Hines, the Rim’s dominant landowner, also sold his properties to a subsidiary of Charlotte-based Big V Property Group last year. The $219.7 million purchase included over 1 million square feet of retail space and vacant land.

Dallas-based Criterion Development Partners purchased approximately 43.5 acres of undeveloped land around Éilan in 2020. The company has entered into discussions with hotel, retail and office groups to develop projects on part of the land, an executive said at the time.

Last summer, Criterion said it planned to begin construction on a 293-unit resort on about eight acres. The company did not immediately respond to a request for information on the progress of the project.

Transactions in the San Antonio multifamily market have declined in recent months due to rising interest rates, higher financing costs, funding constraints and worries about economic headwinds.

“The market has had a significant downturn,” Davis said. “Many investors have taken their assets off the market or are ready to negotiate a price reduction.”

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