San Antonio Express-News (Sunday)
Downtown living options on the rise
Amid a sea of hotels, office buildings, tourist traps and parking lots, Weston Urban is making a big bet on demand for downtown living.
The San Antonio firm has begun construction of a 32-story high-rise at North Main Avenue and East Travis Street. The new tower will include about 354 apartments to be rented at market rates.
The project, dubbed 300 Main, will have about 6,275 square feet of space for retail and a parking garage. It’s expected to cost upward of $107 million and be completed in spring 2024.
“In two years’ time, a hot, soulless asphalt parking lot — and I bet there’s not a person here that can remember when it was anything else — will transform by the work of a lot of great San Antonians into 32 stories of beauty and progress and, really, homes,” Weston Urban co-founder and CEO Randy Smith said at a groundbreaking ceremony.
It’ll be a major injection of apartments downtown, where no project of that size has been built and residential options are few.
The area’s housing stock includes about 247 apartments at the 17-story Inspire Downtown building at 100 N. Santa Rosa Ave., which was previously known as the Vistana, and about 59 condominiums at the 20-story Arts Residences at the Thompson Hotel at Lexington Avenue and North St. Mary’s Street.
There’s also a sprinkling of apartments in buildings such as the Maverick at East Houston and North Presa streets and the Exchange on East Pecan Street.
Rising rents, occupancy
The ’68 at Hemisfair, an eightstory building with about 151 units, was built through a partnership with the Hemisfair Park Public Facilities Corp., which provides a property tax exemption in exchange for including some apartments for tenants at lower income levels.
There are about 8,231 apartments within a 1.5-mile radius of Weston Urban’s planned highrise, according to an analysis by ApartmentTrends.com, which focuses on the Austin and San Antonio multifamily markets. The average rent among those complexes is $1,435 per month, and average occupancy is 91.1 percent, up about 15 percent and 4.6 percent annually, respectively.
Rents are higher but occupancy lower than the metro area’s overall multifamily market. Across 215,469 units, the average rent is $1,190 and average occupancy 94.3 percent. Metro-wide, that’s an annual increase of 15.4 percent and 2.5 percent, respectively.
Why hasn’t more housing been built downtown?
For one, it’s more difficult to secure financing and investors for downtown housing than for a hotel or a suburban apartment complex. Downtown also has less available land, and what is available is often smaller and pricier.
A developer may also need to demolish existing structures, have the land rezoned and receive approval of plans from the Historic Design and Review Commission, said Robin Davis, founder and owner of Apartment Trends.com.
“It has just been within the last year that (return on investment figures) have gone up enough for an appropriate rent on a downtown investment to make a new project feasible,” Davis said.
Another big project
More apartments are in the planning phase across 16 projects, according to ApartmentTrends.com. Those include about 385 more units planned at Hemisfair and construction underway on the Floodgate residences along East Commerce Street.
The groups providing financing for Weston Urban’s high-rise are Bridge Investment Group of Salt Lake City and Bank OZK of Little Rock, Ark. The firm is also receiving about $7.5 million worth of incentives through San Antonio’s now-defunct Center City Housing and Incentive Policy, created about a decade ago to spur downtown housing.
“This 32-story tower will become an important symbol and a part of San Antonio’s skyline ... and, in addition, sends a clear signal that San Antonio continues to move in the right direction,” Mayor Ron Nirenberg said at the groundbreaking ceremony.
Weston Urban’s package includes a 75 percent rebate on property taxes for 15 years and reimbursements for San Antonio Water System fees. The rebate is worth $8.7 million, but about $2.2 million, or 25 percent, will go into the city’s affordable housing fund.
The firm will also get a sixyear, 40 percent abatement of Bexar County taxes, worth about $712,917.
Developer is confident
Smith said Weston Urban is confident there’s interest in living downtown, particularly as the metro area’s population is swelling, and noted that 300 Main isn’t the firm’s only residential project downtown.
Several blocks southwest, it plans to turn a block bounded by San Pedro Creek and Commerce, Dolorosa and Laredo streets into a mix of apartments, offices and commercial space.
The firm plans to rehabilitate the Arana and Continental Hotel buildings and construct a 15-story building with about 255 units between the two buildings. The housing is aimed at students, faculty and staff at the University of Texas at San Antonio, which is building its School of Data Science and National Security Collaboration Center nearby.
“If we can have backpacks and residents and folks after work, that is a cocktail for downtown that we just have not been able to piece together,” Smith said.