Austin-based Periscope Capital Investments is taking the long view on the first phase of The Reserve Seguin, a 198-unit apartment complex that will cost an estimated $32.7 million to build about 35 miles outside of San Antonio.
Business expansion and demographic trends in Central Texas were what motivated Periscope and Verdot to pick the site — that and the prospect of being the first big apartment complex in the Navarro school district, Periscope principal Robert Wall told The Real Deal.
“When we did the research, we found apartment vacancy rates between 1 and 2 percent. We have 11.3 acres on the other side of the freeway and we view this as long-term. 10-year project,” Wall said.
Wall said they intend to remain the owner of the property and has selected a management company for the complex, which he declined to name.
It also helps that communities around Austin are starting to grow with refugees from the “Live Music Capital of the World” looking for cheaper housing.
Wall is watching interest rates as he mulls financing for the second phase of this project, but said he didn’t think rates will be this high in the next five years, when the company expects to break ground on the Phase Two.
This tracks with the sentiment of many multifamily investors lining up to jump into the Texas market despite rising borrowing costs.
“It’s a balancing act, we’re saving money with lower lumber costs that are at $400 a square foot when they were recently at $800,” Wall said.
The first phase of the 235,000 square-foot The Reserve is located at 3558 N. State Highway 123 in Seguin, which has a population of about 30,000. Seguin is located 52 miles south of Austin and 36 miles west of San Antonio.
The Reserve will have six buildings offering one-bedrooms, deluxe one-bedroom and two-bedroom units, according to state filings.
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