JV Equity Partner to Finance South Austin Corridor Multifamily
A joint venture equity partner, a Middle Eastern institutional family office, has been secured for Stillwater Capital’s garden-style multifamily development project in the South Austin Corridor.
AUSTIN, TX—A joint venture equity partner has been secured for Stillwater Capital’s garden-style multifamily development project in the South Austin Corridor. Financial details of the project and partnership were not disclosed.
Berkadia’s joint venture equity and structured capital group led by Chinmay Bhatt, Noam Franklin and Cody Kirkpatrick arranged the joint venture equity partner, an overseas institutional family office.
“Stillwater Capital is a unique platform with a significant track record in Texas and a strong pipeline of multifamily development projects,” said Bhatt. “We were delighted to facilitate a relationship between Stillwater Capital and this Middle East-based family office. We have known the family office for several years and spent a few months in this particular case helping them identify the right developer, market and transaction in the US.”
Phase One of the project broke ground in November. Stillwater Capital will build approximately 750 units in two phases on the site.
The average unit size is expected to be 830 square feet and will feature a mix of studios, one-bedroom and two-bedroom units. Amenities will include a clubhouse, community barbecue grill area, resident lounges, fitness center and in-ground pool.
“This collaboration will be of great mutual benefit to both companies. We are positive that this relationship will achieve great success with this apartment project,” added Aaron Sherman, co-founder and partner at Stillwater Capital.
The project is located 10 to 15 minutes from downtown Austin and within 2 miles of Interstate 35. In addition to downtown access, the project site is also in close proximity to shopping centers, restaurants and schools, and is 20 to 25 minutes from Austin-Bergstrom International Airport.
Berkadia’s 2020 outlook for Austin includes some interesting factoids, namely, a population of 2,248,500 as of year-end 2019, up 2.5% year-over-year, and 861,500 households as of year-end 2019, up 2.7% year-over-year. The median household income is $78,949 as of year-end 2019, up 3% year-over-year. Renter share of wallet is 20% as of year-end 2019, up 40 bps year-over-year.
“With Austin employment forecast to grow 2.2% this year, net migration is expected to accelerate to help underpin the health of the local apartment market,” Bhatt tells GlobeSt.com. “Apple and Google will add thousands of jobs in the coming year as these tech positions keep nearly a quarter of Austin’s population within the Millennial cohort.”
Metrowide, nearly 8,750 deliveries are expected this year. The targeted development will lead to a metro-leading 1,813 units coming online in the Cedar Park submarket as developers provide amenity-rich options near the new 133-acre Apple campus that will initially house 5,000 employees.
The supply-side pressure will shift down occupancy to 94.7% by year-end, nearly on par with the average rate this cycle. Simultaneously, monthly effective rent is forecast to increase 2.8% annually to finish the year at $1,350, Berkadia says.