SAN ANTONIO, TX - Cottonwood Group, a private equity real estate investment firm, announced that it has acquired a 636-unit multifamily portfolio located in San Antonio, Texas with Dallas-based Texsun Holdings for ownership and investment in San Mateo Apartments, located at 3787 Perrin Central Blvd. and Heights on Perrin Apartments, located at 2555 NE Interstate 410 Loop.
The Portfolio benefits from a desirable location in San Antonio's northeast submarket with proximity to some of the city's major employers, including Amazon, Rackspace and Southwest Airlines. The Portfolio is also proximate to an abundance of mixed-use, retail, entertainment and recreation destinations, including Alamo Heights, The Quarry, Terrell Plaza, multiple golf courses, resorts and parks.
"We acquired the Portfolio through our Cottonwood Real Estate Founders Fund, which targets opportunities with a special situation profile. This acquisition opportunity was particularly compelling due to its attractive cost basis, desirable location with positive demographic and employment drivers, and strong operating partner," said Mark Green, Cottonwood's Chief Investment Officer. "We are excited to partner with the Texsun team on this acquisition, a firm whose operational expertise and track record complement our capabilities on the capital markets side, and we look forward to a successful joint venture going forward."
The business plan includes a renovation and repositioning of the Portfolio, for which Cottonwood and Texsun have budgeted approximately $7 million, as well as transitioning management of the Portfolio to ResProp, a multifamily property management firm founded in 2010 that operates more than 9,500 units across 65 properties.
"We are enthusiastic about our partnership with Cottonwood and are eager to grow our footprint in a market supported by excellent growth fundamentals, favorable renter demographics, and limited new supply," said Sean Fogelman, Managing Partner and Co-Founder of Texsun Holdings. "The Portfolio is extremely well located, has very evident operational upside, and with the implementation of our capex plan, we will be able to bring its performance up to the submarket and competitive set norms."
This is Texsun's eighth acquisition in the central Texas corridor, spanning from Dallas to San Antonio, and the firm is focused on expanding its Portfolio in the area.