Bow River Capital has expanded its multifamily holdings in the Southwest and Mountain West with the acquisition of Veranda Apartments in Austin. The property, located at 7205 East Ben White Boulevard, was purchased in partnership with Missio Capital. Newmark secured financing for Bow River and represented the seller, Wayfinder Real Estate.
The purchase price was not disclosed, but appraisal district records assess the property at $45.8 million. Veranda Apartments is a 362-unit complex completed last year, situated about seven miles southeast of downtown Austin near major landmarks including the Austin-Bergstrom International Airport and the Tesla factory.
Bow River Capital refers to its target area as the “Rodeo Region,” a term it has trademarked to describe states including Texas, Oklahoma, New Mexico, Arizona, Kansas, Colorado, Utah, Nevada, Nebraska, Wyoming, Idaho, Montana and the Dakotas.
The firm recently added other properties to its portfolio as well. These include two acquisitions in Kansas City and a 337-unit complex in Midtown Houston previously owned by Camden Property Trust that has been rebranded as Hadley Midtown Apartments.
Market conditions have been challenging for Austin’s multifamily sector due to an oversupply that has pushed down rents and occupancy rates. Last month saw a 7.5 percent decline in rents compared to a year earlier while occupancy dropped to 85 percent according to ApartmentData.com (https://www.apartmentdata.com/). Despite these declines leading to significant losses for landlords and developers (https://therealdeal.com/austin/2024/07/10/investors-smell-opportunity-in-austins-high-apartment-vacancy/), some investors believe that now may be an opportune time to buy.
According to JLL’s Kai Pan last month (https://www.jll.com/), “In fact, rents have fallen so much that the city leads the country in rental affordability.” Pan noted that lower rents combined with high average salaries mean Austin renters spend only about 16.8 percent of their income on rent.
Pan also pointed out positive long-term trends: “Austin’s tailwinds are promising,” he said. Over the past decade, Austin experienced population growth of 30 percent and job growth of 48 percent—both figures surpassing those seen by many other Sun Belt cities.
