SoCo site to get $7M-plus facelift after Austin investors take over
A small Austin investment company has ambitious plans for its big-league acquisition on South Congress Avenue.
Sendera Investment Group LLC purchased the former Berkshire SoCo, an apartment and retail project near State Highway 71, and plans to add nearly $7 million in upgrades immediately and more as it updates all 375 units.
The investor aims to create a more appealing streetscape and support local artists with mural commissions, a sculpture garden and a few units designated to be leased at lower rates for Austin’s struggling creative class.
“We’ve always wanted to be on South Congress,” said Chris Davis, who founded the firm with his brother Gary.
They have just one other employee — Stacey Goyen, vice president and asset manager — who has been with them since the start.
Sendera retains third-party leasing and property management companies for its portfolio — in this case, Greystar, the original developer of the property.
The Davises have rebranded the urban-style property that was completed in 2008 as “The Davis on SoCo,” in tribute to their father Jack Davis, who died in June after a long career in real estate. For many years he had been CFO of Nash Phillips/Copus Builders Inc. — the Texas company responsible for building most of Austin’s homes and apartments during a 40-year period that began in 1945.
Jack Davis helped his sons launch Sendera in 2001.
The Davis on SoCo was one of the first urban-styled, high density developments built in the past decade. It was originally designed as for-sale condominiums but the recession forced Greystar and partner Symcox Development Co. to change course.
After stabilizing the asset, the developers sold the property in 2011 to an entity operated by the Berkshire Group in Boston. That institutional investor put the property on the market this year and Sendera won out over all bidders.
Pat Jones with ARA Newmark handled the deal and said it was gratifying to see Sendera snag this asset.
“Typical buyers in the urban infill space in the last 12 months have been (from) out of state,” Jones said. “It is unique to see a local company step up to this level and acquire a trophy asset on South Congress.”
The actual purchase price was not disclosed but the Travis Central Appraisal District values the property, which includes 22,183 square feet of retail on nearly seven acres, at $75.5 million — that’s likely a conservative number.
Chris Davis said the firm weighed the risks carefully, noting that “we always put our own money in the deal.”
Ambitious rehab project
Sendera will use the services of local companies in the renovations and also will aggressively support its roster of retail tenants along the strip dubbed “Shops at SoCo.”
Just one retail space is available for lease now that Pflugerville’s Taste of Ethiopia has opened a second location in a sizable vacant spot. Stream Realty Partners is handling retail leasing.
Thomas Bercy and Travis Lucy of Bercy Chen Studio in Austin are handling the architectural updating of The Davis on SoCo with Kelle Contine Interior Design consulting on the interiors.
Artist Bale Creek Allen has been retained as the development’s art consultant. Construction contracts have yet to be determined.
The rehab is one of the most ambitious for Sendera even though it’s known for adding value to an estimated 9,700 units it has owned in Texas and Florida during a 15-year history. Currently, the company owns a 350-unit waterfront property in Corpus Christi and a 412-unit property adjacent to the University of Texas in San Antonio.
Recently, the company sold Sendera Barton Creek near the swanky Barton Creek Country Club and Omni Barton Creek Resort & Spa to The Connor Group in an unsolicited offer.
The Davis at SoCo is a decidedly different type of asset but one that hold great promise with 96 percent occupancy at the time of closing. At the moment, rents average $1.56 per square foot — about half of what new luxury downtown apartments are leasing for and 40 cents per square foot less to comparable nearby inventory.
Units at The Davis on SoCo tend to be larger than other urban style apartments — another upside. Some 65 percent are one-bedroom units with the rest two-bedroom units.
Many St. Edward’s University students call the development home, but the new owners expect a greater diversity of renters who love the South Congress vibe and are drawn to Sendera’s improvements.
Source: Austin Business Journal
Jan Buchholz, Senior Staff Writer