ROUND ROCK, TX-Tonti Properties has acquired La Frontera Square, a newly completed mixed-use development with 349 apartments and 46,159 square feet of retail, for an undisclosed amount. The approximate development cost for the class A property was more than $45 million, according to local industry experts.
The Dallas-based investor purchased La Frontera Square from the developer, North American Properties, through a deed-in-lieu of foreclosure deal with the lender, Compass Bank. Although property was not marketed, Compass Bank made it known that it wanted to offload the note on the property.
Tonti Properties competed with at least five other investors who were eager to acquire the note from Compass Bank, according to Rick Perdue, director of acquisitions for the family-owned company. He tells GlobeSt.com that his firm won the deal because of its ability to do an all-cash buy on a tight timeline, closing just one day after it executed the purchase agreement.
Located at 2601 La Frontera Blvd., the property features a unit mix of one and two bedroom unit ranging from 755 square feet to 1,406 square feet. Units are fitted out with 10-foot ceilings, granite countertops and stainless steel appliances. It offers three courtyards, a lap pool, garage parking and four fitness centers.
Currently, La Frontera Square’s multifamily portion is 90% leased, and the retail portion is completely vacant. “We think there will be additional upside as we get the retail leased,” Perdue says, adding that Tonti Properties is currently evaluating third-party leasing and management firms for the retail space. “It’s a difficult leasing environment for retail, and we plan to aggressively market our space. But, it’s going to take at least 12 months to get it occupied.”
La Frontera Square represents Tonti Properties’ first acquisition in the Austin metropolitan area, Perdue notes, adding that the company is looking for additional investment opportunities in the market.
“La Frontera Square is a beautiful property with a great location with easy access to retail and transportation,” Perdue says. “We like the asset, and we’re excited about the future of Austin. We plan to hold this property indefinitely.”
With a portfolio of 5,000 multifamily units in markets across the Southwestern and Southeastern U.S., the company also is actively searching for assets in Arizona, Colorado, Florida, Texas and North Carolina.
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