By Dees Stribling, Contributing Editor
San Antonio—Embrey Partners Ltd. has broken ground on Slate Creek in the Westover Hills neighborhood of San Antonio, a 222-unit apartment project at the Hyatt Hill Country Resort. Separately, the company has sold two other properties with multifamily components, one in San Antonio and another in Phoenix.
The Slate Creek project is an upscale multifamily development on nearly 15 acres overlooking the 2nd, 3rd and 4th holes of Hyatt Hill Country Resort golf course. The site is currently home to 19 existing three-bedroom townhomes and a swimming pool. When complete, Slate Creek will feature the new apartments, as well as two resort-style swimming pools, a fitness facility and a dog park.
The development’s one- to two-bedroom apartments range between 622 square feet and 1,089 square feet, with occupancy anticipated by the second quarter of 2012. Previously, Slate Creek was purchased by San Antonio-based Hurd Urban Development Ltd., who is partnering with Embrey Partners on the redevelopment of the property. Embrey Management Services currently manages the existing townhomes.
Financing such developments remains tricky. “The real estate itself remains a critical element,” Mike Elder, executive vice president of finance at San Antonio-based Embrey Partners, tells MHN. “There has to be a compelling reason for investors to choose ground-up development over acquisitions. Right now, the deals that are getting done are traditional urban-core development and those near major employment centers.”
With its relatively strong economy, San Antonio counts as a major employment center these days. Elder also stresses long-standing relationships between developers and lenders as critical to getting deals done—a situation that he says works for his company. “Embrey Partners has developed strong relationships with both debt and equity providers,” he notes. “These relationships have provided a stable source of capital during challenging times.”
Elsewhere in San Antonio, Embrey Partners has sold Quarry Village for an undisclosed amount to a Dallas-based real estate private equity fund advised by Crow Holdings Capital Partners L.L.C. (“CHCP”) The 10.7-acre, mixed-use property includes the Artessa, a 280-unit apartment community, and a 70,780-square-foot retail development.
At the time of sale, the apartment component of the property was 98.5 percent occupied. Artessa features units ranging from 682-square-foot, one-bedroom apartments to 3,000-square-foot penthouses, some facing the property’s main street, while others overlook the Quarry golf course.
The property is the second Embrey development that a CHCP-advised fund has bought, and the third San Antonio apartment purchase by the institutional buyer since it took an interest in the market about a year ago. CHCP has retained Embrey Management Services to provide property management for the Embrey developments, as well as the Preserve on Fredericksburg, the other San Antonio asset owned by an affiliate of CHCP.
In another recent deal, Embrey Partners sold the Residences of FortyTwo25 in East Phoenix, a 357-unit upscale apartment property, to Papago Multi Venture L.L.C. for about $42 million. Developed by Embrey Partners with Chicago-based equity partner the Tuckerman Group in 2009, the property was 95 percent occupied at the time of its sale in August.