AUSTIN—Population in the Austin-Round Rock metropolitan statistical area increased by 3% in 2012. This growth is driving multifamily activity in the area, including suburban markets like San Marcos.

CenterSquare Investment Management and Falcon Southwest have sold the Palazzo, a 300-unit apartment community in San Marcos, Texas to a private owner/operator. Patton Jones and Andrew Shih, principals with ARA represented the seller.

Berkadia Commercial Mortgage LLC arranged $21.9 in financing for the acquisition of the asset. The fixed-rate loan features a sub-4.5% interest rate.

The garden-style apartments are located at 1011 Wonder World Drive. The asset is currently 95% leased and features studio, one-, two- and three-bedroom layouts.

"The booming economy in Texas is spurring the growth of the multifamily market in many suburban areas, particularly near Austin and Houston," says Andy Hill, vice president with Berkadia. "This increased level of activity is creating a dynamic and exciting market as we strive to continually offer our clients the competitive financing options they need."

San Marcos is located in the I-35 corridor, south of Austin and north of San Antonio. According to Apartment MarketData Research, San Marcos' occupancy rate is 94.4% and has an average rental rate of $1.00 per square foot per month while the Texas average is only $0.93 per month. San Marcos is home to Texas State University with 34,229 students providing a solid tenant base in the region.