Headwall Investments is expanding its Austin portfolio, acquiring a retail property in the fast-growing suburb of Georgetown.
The San Antonio-based firm recently bought the 55,000-square-foot Market at Georgetown shopping center at 610 North Austin Avenue for an undisclosed amount, the San Antonio Business Journal reported.
The property was recently valued at $8.2 million, according to the Williamson County Appraisal District. It’s the second shopping center Headwall has acquired in the Austin-area.
The company targets retail properties with strong occupancy rates in growing areas that often get overlooked by larger institutional investors. Headwall has spent 90 percent of its first shopping center fund, and it will begin raising capital for its second fund in the fall, according to CEO George Wommack. The firm has pivoted to more investments in Austin because of the lower cap rates and higher occupancy and rental rates compared to San Antonio.
“But we don’t see that trend necessarily continuing in perpetuity. I think that as the markets continue to grow together, the gap between the two markets will close,” Wommack told the outlet “I don’t know that it’s ever going to reach parity between the two markets, but every year that goes by, it seems to be getting closer and closer to that point.”
Raising capital has become increasingly difficult in today’s market, plaguing the real estate industry as a whole, he added. However, if it’s a low-risk investment with solid growth opportunities as far as value-add and cash flow, “the money’s there,” he told the outlet.
Headwall will begin analyzing rental rates in other Texas markets, as it prepares to invest in markets like Houston and Dallas-Fort Worth.
—Quinn Donoghue
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