Lavora Looks To Sell Affordable Apartments In Southtown

Lavoro Capital Holdings is looking to part ways with a multifamily asset in San Antonio.

The Dallas-based firm has hired Newmark brokers Matt Michelson, Patton Jones and Andrew Dickson to sell its portion of Trove Southtown, a 252-unit affordable housing complex at 301 East Cevallos Street, the San Antonio Business Journal reported.

An official asking price has not been disclosed, but the property was last valued at $35.2 million, according to the Bexar Appraisal District. Interested buyers have until Oct. 4 to submit offers to Newmark.

Lavoro, which owns the site in a public-private partnership with the San Antonio Housing Trust, is offering its Trove Eastside complex in Austin as part of a package deal.

Prospective buyers have the option to assume a long-term fixed-rate loan on the property, which has become increasingly attractive among investors amid rising interest rates and a tight lending environment. Trove Southtown has a 3.16 percent fixed-rate mortgage that runs through 2031, and it has an occupancy rate of 90 percent.

Lavoro acquired its portion of Trove Southtown in 2021. The complex operates under a mixed-income model, with 25 percent of units reserved for renters earning 50 percent of the area median income or lower, another 25 percent for those making 80 percent of the AMI and the remaining 50 percent set at market rates. The Public Facility Corporation structure, established by the Housing Trust, still remains in place, offering potential buyers a 100 percent tax exemption for the duration of the ground lease, the outlet said.

Newmark could struggle to find a buyer given the struggles of San Antonio’s multifamily sector. Last month, the city’s apartment occupancy rate was 88.2 percent, marking a 10-year low and down from the 92-93 percent range that was common throughout the initial years of the pandemic. With over 16,000 units in the development pipeline, apartment vacancies could continue to climb in future months, especially since rental activity is expected to slow down.

—Quinn Donoghue