Wells Fargo (Access5) LA/S
January 7, 2015

Hartman REIT Buys
San Antonio's Energy Plaza I & II

San Antonio's Energy Plaza I & II office buildings traded hands this week when an affiliate of the Houston-based Hartman REIT snapped up the 180k SF as part of the REIT's plans to grow in the Alamo city.

Hartman Income REIT's Dave Wheeler (right with Cushman & Wakefield's Scot Farber) tells us the two-building complex has been on Hartman's radar since late 2013. The occupancy and rents are good in the buildings and the pricing was favorable, he says. The challenge with this property was the loan assumption that was part of the deal. Most buyers want to engineer their own capital stack, Dave says, so many of the competitors for the property were trying to put in less equity. Hartman, however, put down a significant down payment to buy the property with low leverage, which gave the REIT the edge over the competition, Dave says.

CohnReznick (Field) MA/S

The Energy Plaza buildings are 95% occupied and anchored by a long-term lease with the San Antonio Petroleum Club. The property's two-story atrium-style lobbies were remodeled in 2013. CBRE's Todd Mills and Carrie Caesar repped the seller, a subsidiary of Accesso Partners. Dave and colleagues Julian Kwok and Russell Turman repped the buyer. 

Hartman also owns the 182k SF Walzem Plaza retail center (pictured) in San Antonio and is looking for more opportunities, Dave tells us. He's heading to San Antonio next week to look at three more properties on the REIT's shortlist. His team has been touring and reviewing assets in the area for more than 18 months. Hartman acquired about $55M in assets in San Antonio, Dallas-Fort Worth and Houston in 2014 and Dave expects about the same amount of investment or more this year. He didn't make any New Year's resolutions, he tells us. “When I want to do something, I just do it,” he says.

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CohnReznick (Field) A/S
Wells Fargo (Access5) A/S

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Nimes Capital Buys The Ballpark

The Ballpark, a student housing apartment complex in Austin's East Riverside, was acquired by Nimes Capital. Walker & Dunlop managing director of multifamily finance Will Baker (here with his wife Susannah and six-month-old daughter Annie on a trip to Turks and Caicos last week) arranged the acquisition loan and tells us it was a unique and challenging deal—Nimes purchased the asset out of foreclosure in a stalking horse auction. It was awarded the deal after a full sales and marketing process by FourPoint Investments, but it could've been outbid on the courthouse steps.

Because of that uncertainty, Nimes couldn't secure permanent financing at the time of the auction. Walker & Dunlop provided a short-term bridge loan using its balance sheet so Nimes could secure the deal, and simultaneously worked on a perm loan from Freddie Mac. Once the interim loan was closed, Nimes was able to lock in that $23M, non-recourse 10-year loan. The Ballpark was built in 2000 and has 768 beds. Will says Austin should be a pretty strong student housing market this year. There's been some new development (like Lennar and Blue Vista's project on UT West Campus), and enrollment growth isn't as hot as San Marcos, Texas Tech and A&M, but there's no significant softness.

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Swinerton (BuildBold) A/S
Xceligent (Director) A/S

Multi-Tenant Retail Appeals to
New Real Estate Investors

Attractive financing options are luring wealthy investors to test the real estate market. SHOP Cos founding partner Tommy Tucker tells us some of these new real estate investors are jumping on retail projects he and colleague Tim Axilrod have sold. Seeking diversified yield, more investors that are new to real estate are turning towards retail, particularly multi-tenant retail (versus compressed yields in single tenant retail), for cash flow and perceived ease of management, Tommy tells us. Financing options create solid leveraged returns for investors, he says. 

For example, Stone Oak Square (pictured), a 16k SF fully occupied shopping center in San Antonio, was originally marketed for sale with a loan assumption in place. That loan was onerous compared to market alternatives, but required a massive penalty to pay off. As the market strengthened (both pricing in favor of the seller and loan terms attractive to the ultimate buyer), the buyer was able to pay in excess of list price to effectively pay the cost of the seller's loan penalty. That wouldn't have been possible six to 12 months ago and beyond, Tommy says. 

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REFM (Valuate) A/S
Bisnow (Niche-White) HALF

Amstar & Transwestern Partner on San Antonio Apartment Project

The latest in a string of new multifamily developments in San Antonio is the 229-unit Southtown FlatsAmstar and its development partner, Transwestern Development Co, acquired a 2.3-acre development site at 111 Probandt St in San Antonio with plans to build an apartment building. The infill development will begin construction this month with the first units scheduled to deliver in Q1 2016

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Brrrrrrr-ing on the colder temps; we have your deals to keep us warm. tonie@bisnow.com and catie@bisnow.com