As rents rise, investors flock to San Antonio’s red-hot apartment market

As rents rise, investors flock to San Antonio’s red-hot apartment market

Waylon Cunningham, San Antonio Report

Jan 14, 2022

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Encore SoFlo, an apartment complex at 326 South Flores Street, was recently bought by a Dallas-based private equity company.

Credit: Nick Wagner / San Antonio Report

“Strategic Property Investment Advisory, or SPI, is a Dallas-based group that has gone on a buying spree in the city since August, most recently purchasing the Encore SoFlo, a 339-unit luxury apartment complex in downtown San Antonio. Among its amenities are a fitness center, a rooftop lounge and dog washing station. It was valued by Bexar County appraisers last year at $64 million, but as in most commercial real estate transactions in Texas, the sale price was not disclosed.

SPI is part of the growing share of private equity firms purchasing apartments in the city. Private equity firms use large amounts of debt, or leverage, to purchase real estate, putting the debt on the assets. This approach offers investors a chance to get a profitable return sooner than bonds or public companies. And as the Fed continues to hold interest rates near zero — originally part of an effort to stimulate growth under the pandemic — leverage is cheap.”

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