An Austin-based firm is looking to flip a sizable Class-B multifamily holding in Texas’ fastest-growing region.
Veranda Holdings LTD, associated with commercial real estate firm Ungar & Company, has listed two adjacent Class-B apartment communities in San Marcos. CBRE is marketing the Avalon and Verandah apartments, according to a brochure.
Avalon is located at 1703 N IH 35 Frontage Road, and Verandah is at 1805 N IH 35 Frontage Road. The two communities span 13 acres off Interstate 35 in the Austin-San Antonio corridor, one of the busiest highways in Texas with a transit population of nearly 5 million.
The asking price was not disclosed, but the combined value is nearly $17 million, or about $58,000 per unit, according to the Hays County Appraisal District. Rent for a one bedroom at either of the communities is about $970 per month, according to listing websites.
The current owners invested over $1.3 million into the community and are marketing the units with a “high renovation potential,” the marketing brochure states.
Corporations like Amazon and Urban Mining Company have established large manufacturing facilities in San Marcos as the city’s population has boomed in the past decade.
The U.S. Census Bureau has named San Marcos the “fastest growing city in America,” among cities with more than 50,000 people, multiple times. At the 2010 census, the city of San Marcos had a population of 45,000 and is now home to well over 70,000 residents. The corridor between Austin and San Antonio is “America’s next great metropolis,” according to Forbes. As the 74-mile stretch between the two metros grows, the cities in between, like San Marcos and New Braunfels, are slowly connecting Austin and San Antonio into one giant metroplex.
San Antonio is a better city for investment than Austin as rising interest rates have led to market slowdowns, The Real Deal publisher Amir Korangy told the San Antonio Current recently. The city’s economic fundamentals make it less likely to face as severe a downturn as its sister city up Interstate 35, he said.
“It should be well-suited to work through a slowdown,” Korangy told the publication. “However, especially on multifamily, which has a robust pipeline and is poised to begin slow increases in rental rates, perhaps providing pause that will bring some equilibrium.”