SAN ANTONIO-Windmill Investments has continued its Texas commercial real estate investment strategy by adding the 272-unit Bent Tree Apartments to its portfolio. The buyer acquired the class B multifamly property from Venterra Realty.
Bent Tree at 4801 Gus Eckert Rd,, was built in the late 1970s and is 95% occupied. Casey Fry with Apartment Realty Advisors brokered the transaction.
Windmill Investments partner Lawrence Schwartz tells GlobeSt.com that approximately $700,000 to $1 million in upgrades is planned for the property and BH Management has been hired for on-site management. The multifamily property's location is ideal; it's located close to USAA Life Insurance Co. as well as nearby San Antonio Medical Center, both of which are large employers.
And, according to Windmill Investments founder and CEO Daniel Carter, Bent Tree fits well within the company's strategy to buy in the middle range and to add value to what it buys. "We see two ends of the market, and the middle," Carter explains to GlobeSt.com. On the smaller side are the investors paying out $1 million to $8 million for assets, while on the other side are the institutional investors, pension funds and other large companies that pay huge dollar amounts. "We like the $8 million to $18 million price range for our properties," Carter says.
That's the first point of Windmill Investments' strategy. The second point is picking up multiple properties in a market for critical mass and economies of scale. As such, the company also owns the 152-unit La Sierra Apartments at 520 FM 306 in New Braunfels and the 172-unit Carrington Place at 825 Johns Rd. in Boerne, TX.
San Antonio as an investment locale also made sense to Windmill Investments because it remains less competitive – and less expensive -- than the other major metros in Texas. Furthermore, the area has Fort Sam Houston, is a great tourist location and has a growing IT sector. "Then you have Eagle Ford Shale just south and east of there, which brings more people into the area," Carter observes.
Schwartz says that when Windmill Investments first targeted the metro a couple of years ago, it was considered a solid, steady market – an area in which an investor could buy a property with solid occupancy and income. As more investors show interest in San Antonio, however, the investment atmosphere has become more competitive.
"We have to be more diligent in finding acquisitions that meet our metrics," Schwartz acknowledges. "Fortunately, we've developed good relationships and are still finding acquisitions that meet our critieria and are worth pursuing."
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