Cortland Partners Enters Austin, Seeking Value-Add
Cortland Partners entered the Austin market with the acquisition of City View Apartments, a 308-unit, 93% occupied community near the CBD. CIO Mike Altman (pictured here) says Cortland has tried for years to get into Austin, and the biggest challenge was sticking with it despite previous misses. CEO Steve DeFrancis says land and construction costs are starting to limit multifamily development, which means the city can’t rely on new construction alone to meet all the rental demand. Cortland will renovate City View ($25k per door, for a nearly $8M overhaul); Mike says it will be nearly unrecognizable and rival newer product. The firm is looking for other value-add opportunities throughout the Austin and San Antonio metros. It recently bought a property in San Antonio and already owns 19 multifamily projects in DFW, Houston and San Antonio.
While Steve may be skeptical of rising costs for new construction, most believe this is a great time for multifamily development in Austin as young adults are still flocking to the city for its job opportunities and cultural offerings. The Austin Chamber of Commerce reports that employers created 32,500 new jobs between June 2014 and June 2015, representing a 3.6% growth rate over that time. With numbers like that it’s no wonder that Atlanta-based Cortland has been eager to expand into the Texas capital. (In case you don't recognize him from the first picture, Mike's under the yellow O here.)