Weaver Surrenders Downtown Austin Apartments to Lender

A lender has repossessed a downtown Austin apartment complex, as developer Weaver Buildings surrendered it via deed-in-lieu of foreclosure.

Churchill Real Estate Holdings recently seized the 45,000-square-foot Capitol Quarters at 1108 Nueces Street, just 13 months after tenants started to move in, the Austin Business Journal reported.

Weaver began pursuing the shared-occupancy project in 2019 and started construction in 2021, with the goal of providing affordable housing for young professionals amid skyrocketing rental rates. However, the company struggled to maintain healthy occupancy levels, partly because of decreased downtown activity following the pandemic, Weaver president Jen Weaver said.

“We couldn’t have predicted the radical market changes the pandemic yielded,” Weaver told the outlet. “I am proud of the integration into the existing walkable community and the new community that was created here. I will be watching to see how the building adapts to the future of Austin.”

Deed-in-lieu of foreclosure allows the borrower to give the building back to the lender while avoiding foreclosure.

New York-based Churchill intends to retain ownership of the property and upgrade its amenities. Current tenant leases will be honored.

Capitol Quarters, located just a few blocks west of the Texas State Capitol, was most recently valued at $14.5 million by the Travis Central Appraisal District. It has 30 three-bedroom, two-bathroom units, which are similar to student housing in that they are shared with roommates. Bedrooms cost $1,200 per month unfurnished and $1,600 per month furnished. The average monthly rent for downtown apartments is $2,443.

The building also has 6.200 square feet of office space.Hybrid work trends have caused downtown office occupancy rates to fluctuate greatly on a day-to-day basis, as they ranged from 41 to 71 percent between Sept. 21-27, the outlet reported, citing data from Kastle Systems’ Back to Work Barometer.

—Quinn Donoghue