First Market Takes on 405-Unit Distressed Asset

SAN ANTONIO-First Market Properties LLC has made its first foray into San Antonio – and concluded its second Texas buy – with the acquisition of the 405-unit Reserve at Pecan Valley Apartments. The Florida-based, value-add buyer acquired the foreclosed asset from Capmark Affordable Properties Inc. for approximately $3.8 million, with plans to invest at least as much to upgrade the distressed asset.

Aaron Kurlansky, senior vice president with First Market Properties tells GlobeSt.com that the asset at 4032 East Southcross Blvd. allowed him to enter the market aggressively. “It’s well-located and San Antonio is a stable rent market,” he explains in an e-mail. “The barriers to entry are high.” Kurlansky adds that joint venture partner Newport Property Ventures will handle the management and construction rehab, which will consist of amenities upgrade and unit improvement.  “This is our first major rehab project to date,” he adds.

In September, First Market Properties made its first Texas buy, snagging a non-performing mortgage on the 338-unit Stonehaven at Galleria at 6419 Skyline Dr. Kurlansky says nothing is scheduled to close in the Lone Star State buy year-end, but notes that assets in Alabama and Florida are in the pipeline.

Mike Miller of Hendricks & Partners represented the seller with colleagues Chris Ross and Will Caruth, and says the asset was widely marketed and attracted many private buyers. Ultimately, he says, First Market Properties was the most qualified. “I think we received a fair number of offers on this because it came to an inexpensive price per door,” Miller tells GlobeSt.com. “The price points were a little lower than market rate.”

This is not to say, however, that First Market Properties will have a cakewalk with the asset. “This is a pretty large rehab,” Miller acknowledges. “About half the units are down and need to be renovated, and it’s about 50% occupied.”