Palladius Capital Management likes the Austin-San Antonio Interstate-35 Corridor in Texas.
The Austin-based investment manager has acquired more than $170 million of real estate in the corridor over the last 12 months and more than $550 million since 2014.
Palladius, which manages and operates approximately $800 million of real estate, has lent another $90 million over the last 12 months for multifamily, industrial, hospitality and retail properties in the corridor.
“In our opinion, it is one of the best and fastest-growing corridors in the country,” Palladius CEO Nitin Chexal told Multifamily Dive. “When you look at Austin and San Antonio, you see job growth and wage growth outsized relative to the national average, a no-income-tax environment and a low cost of living.”
The Austin and San Antonio corridor also has the state capital, major universities and a strong employment base with tech jobs, including artificial intelligence careers and data centers, according to Chexal.
“We can't think of a better channel to invest in today versus anywhere else in the country,” Chexal said. “You also have very limited climate risk. You're not in a tier-one wind zone.”
Student housing addition
With a strong appetite for student housing along the I-35 corridor, it's no surprise Palladius bought The Luxx, a 694-bed, 220-unit student housing property located approximately 1 mile from the academic center of The University of Texas at San Antonio, earlier this month.
“What we like about the market, and UTSA specifically, is that it is a flagship spillover school to UT Austin,” Chexal said. “We're big believers in these schools, and the school's been growing very rapidly. There's very limited new supply, and the rents are just continuing to climb higher in this sub-market.”
The Luxx, built in 2014, offers fully furnished units with bed and bath parity, in-unit washer/dryers and walk-in closets. Its amenities include a resort-style pool, study spaces, a volleyball court, a fitness center, a dog park and outdoor grills. It is 10 minutes from UTSA and has a dedicated stop along one of the school’s shuttle routes.
Palladius plans light in-unit renovations, including new stainless-steel appliances and various bathroom improvements. Common area upgrades will focus on the fitness center, pool, dog park, courtyard and clubhouse.
“By this time next year, we think this asset will be leading the market in terms of rental rate and pace of pre-leasing,” Chexal said.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
