Old Three Hundred Capital, an Austin-based private equity firm, has secured $47.3 million in acquisition financing and preferred equity to buy a multifamily property in a tony San Antonio neighborhood.
Lantower Alamo Heights is a four-story apartment complex at 327 W. Sunset Road that was built in 2015. It has 259,951 rentable square feet with 312 one-, two-, and three-bedroom units.
Prime Finance provided a non-recourse, floating-rate acquisition loan. The preferred private equity comes from Sound Mark Partners, a private credit spinoff from CBRE headquartered in Greenwich, Connecticut. JLL’s Marko Kazanjian, Chris McColpin, Max Herzog and Andrew Cohen in the firm’s New York and Austin offices brokered the deal.
The complex is about a mile from the boundary of Alamo Heights, a city with its own school district incorporated in 1922, now surrounded by the city of San Antonio.
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Old Three Hundred’s acquisition is in line with recent trends in Texas’ multifamily markets. As the state’s population swells with new residents, residential building continues to boom despite recent interest rate hikes and other shifting market factors. Texas’ five biggest markets saw a 26 percent year-over-year increase in multifamily building permits in the first quarter of 2022.
More recently, Cottonwood Group and Texsun Holdings just bought two San Antonio multifamily properties with a total of 636 units. DB Capital just bought its second multifamily property in Alamo City, with 408 units in 18 buildings, and plans to purchase more of the same. And IMPACT Developers just announced it’s building a 318-unit farm-themed apartment complex near SeaWorld San Antonio.
Multifamily investment in San Antonio is being driven by increasing overflow from the nearby red-hot Austin market where rents are rising at a record-setting rate, and far outpacing income growth.
And rents are unlikely to plateau anytime soon. With home prices in Austin continuing to spiral upwards, and mortgage rates on the rise, more and more would-be homebuyers are being pushed into the rental market, putting further upward pressure on rents.