By Ryan Salchert – Reporter, San Antonio Business Journal
August 16, 2018
An estimated $2.77 billion in multifamily and commercial real estate involving 2,139 properties was sold in the San Antonio metro area from Jan. 1, 2017, to Aug. 6, 2018, according to data from CoStar Group.
The makeup of buyers and sellers is as diverse as the types of properties changing hands, and their reasons say much about where the local market is and where it’s heading. On the buying side, there are investors such as brothers Jeff and Rami Kotel, co-founders of Woodland Hills, California-based Kotel Investments. Since 2017, the Kotels have bought 14 retail, office and industrial properties across San Antonio, worth roughly 11.5 million, according to the Bexar County Appraisal District. Other buyers such as Chicago-based Sherman Residential spent an estimated $100 million to buy the 308-unit Axis at the Rim and the 399-unit Pecos Flats.
Not only has San Antonio attracted buyers from more than half the states in the country and every major market in Texas, but also international investors. Since 2017, Vancouver, Canada-based Western Wealth Capital bought three apartment complexes for nearly $64 million, and even local companies are making some big investments, like newly formed Kairoi Residential, which bought a 1,210-unit apartment portfolio that was appraised at $48.1 million.
Real estate’s predicable life cycle also means that most buyers will eventually become sellers, as will builders. San Antonio has seen many developers sell newly built properties recently, including local developer Embrey Partners, which sold three apartments that were last appraised for $134.8 million or Atlanta-based Robinson Weeks Partners and Albuquerque, New Mexico-based Titan Development, which sold two properties at the Enterprise Industrial Park for $52.1 million. And buyers who came to San Antonio seeking value-add properties have invested in improvements, stabilized occupancy and moved onto new opportunities, like local investment firm Redrock, which sold the Highpoint Towers for an estimated $31.5 million or Santa Ana, California-based NNN Apartment REIT Inc., which sold two apartments that were apprised for $58.6 million.
As San Antonio’s image has grown on the national stage, so too has the volume of its real estate transactions.
The number of commercial and multifamily transactions in San Antonio has more than doubled in 10 years. From Jan. 1, 2007, to Aug. 1, 2008, before the recession, there were 1,044 commercial real estate transactions in San Antonio, according to CoStar Group, representing a sales volume of roughly $1.08 billion. Current numbers show that retail transactions alone outpaced all sales a decade ago, with 1,093 properties sold in the last year and a half. These retail transactions accounted for roughly $453.6 million and 9.4 million square feet of property. While multifamily accounted for the least-sold property type from 2017 to 2018, only 227 transactions, it accounted for a vast majority of the sales volume during that period and alone outpaced the total sales volume from 2007 to 2008 of roughly $1.6 billion.
Why value-add investors are buying in San Antonio
Commercial real estate buyers, regardless of the types of property they’re seeking, generally fall into two categories: the value-add investor and the core investor. Value-add investors are generally looking for more affordable, perhaps older product that can be improved to maximize their investment.
“There’s no question that the largest buyer pool today in San Antonio is chasing value-add properties,” said Matt Michelson, managing director for ARA, A Newmark Company.
Several notable buyers, such as Kotel Investments, have chosen San Antonio because of the value-add opportunities the city presents.
“San Antonio has always been good for us,” Jeff Kotel said in May. “Everything we hear [about San Antonio] is always positive news, and while it’s not as fast of a market as you’d see on the West or the East, you also don’t really have to worry about downturns.”
Other buyers, like Western Wealth Capital in Canada, have begun investing in the San Antonio market because of its low risk and potential for growth. Since November, the company has bought three apartment complexes: the 204-unit Sereno Park, the 276-unit Brynwood Apartments and the 296-unit Sedona Canyon.
“We believe San Antonio is at a perfect intersection, providing the lowest investment risk and the longest runway for opportunity,” Western Wealth Capital co-founder and CEO Janet LePage said last year. “In terms of timing and potential, San Antonio is at an excellent entry point to create scalable growth.”
Why core investors are buying in San Antonio
As many value-add investors as San Antonio attracts, the city has also seen its share of core investors recently. These buyers seek the best and flashiest properties, often those that have been recently built and are stabilized. These sales typically make headlines due to their prices. In mid-2017, Suffern, New York-based Castle Lanterra Properties bought the 349-unit Agave Apartments in Southtown, which was appraised at $72.5 million. Castle Lanterra Properties founder and CEO Elie Rieder said San Antonio’s growing reputation and economic strength helped make her decision to invest here.
“San Antonio has emerged as one of the strongest multifamily markets in the country due to its exceptional economic and population growth,” Rieder said last year. “In Agave, we identified a best-in-class property that fits perfectly with our strategy of complementing our existing value-add portfolio with stable core urban assets in irreplaceable locations. We will continue to pursue opportunities in both asset classes.”
And San Antonio doesn’t just provide opportunities for core multifamily buyers. Last year, USAA Real Estate Co. bought the $88 million Bank of America Plaza downtown from a pair of investors from the Northeast, and the Business Journal recently reported that New York City-based private equity firm Blackstone Group LP is under contract to buy San Antonio’s most expensive property, the 644-acre JW Marriott San Antonio Hill Country Resort & Spa, for a nearly $650 million.
“Overall, our investment strategy has been to target high-quality, well-located assets, and we do know that this is one of the premier buildings in San Antonio,” said Samira Bitar, senior director of marketing at USAA Real Estate Co., about the Bank of America Plaza in August 2017.
By Ryan Salchert – Reporter, San Antonio Business Journal
Woodland Hills, California-based Kotel Investments, which owns more than 50 industrial and retail properties between San Antonio and Austin, has bought four properties in San Antonio and sold a 50,175-sqaure-foot commercial park in Austin, the firm announced.
The group closed on the following properties in San Antonio:
- 13607 Topper Circle, 5,450 square feet, office warehouse
- 10500 Broadway St., 20,000 square feet, office warehouse
- 819 and 823 S. Laredo St., 13,000 square feet, office warehouse
- 8121 Culebra Road, San Antonio, 14,000 square feet, retail center
The properties will be managed by Kotel Investments MGMT Inc. While the founders of Kotel Investments, brothers Jeff and Rami Kotel, did not specify the price of each property, the combined value of the portfolio was last appraised by the Bexar County Appraisal District for $3.8 million.
The firm also recently sold the 50,175-square-foot Bratton Lane Commercial Park in Austin for an undisclosed amount to an undisclosed buyer. Located at 16501 Bratton Lane, the property was appraised by the Travis County Appraisal District for $3.8 million. Joshua Swank of NAI Partners brokered the deal on behalf of Kotel Investments.
By Ryan Salchert – Reporter, San Antonio Business Journal
May 14, 2018
Since entering the market 14 years ago, Jeff and Rami Kotel, brothers and co-founders of Kotel Investments, have amassed nearly 50 industrial and retail properties between San Antonio and Austin, and the California-based duo will soon add four new ones to their growing Texas portfolio.
“We’re actively purchasing properties right now, and we’re definitely in the buying mood,” Rami Kotel said.
Starting their real estate careers in San Antonio under the their uncle Efraim Abramoff, president of development and investment company Ariel Texas Star Inc., the brothers moved to Woodland Hills, California, to start Kotel Investments. Mainly concentrating on commercial real estate investing and leasing, the brothers looked back to San Antonio to start investing in properties.
The four properties on the Kotels’ current shopping list consist of three industrial spaces and a retail center — all either Class B or C products. And while they don’t currently develop property in Central and South Texas, they revealed plans to build an industrial spec building on 10 acres in Kyle.
“San Antonio and Austin’s industrial markets are very hot right now, and there’s a definite need for space. That’s why we’re thinking of developing in Kyle. There’s hardly any inventory out there and quite a big demand for it,” Rami Kotel said.
Kotel Investments has industrial product across a majority of the Interstate 35 corridor, including in the strong industrial market of Schertz. Industrial buildings make up nearly 75 percent of the company’s portfolio, it said.
“San Antonio has always been good for us,” Jeff Kotel said. “Everything we hear is always positive news, and while it’s not as fast of a market as you’d see on the West or the East, you also don’t really have to worry about downturns.”
While industrial space remains the company’s most desired product for investment, Kotel owns a fair amount of retail space. As online retail sales have become more of a factor, the company’s approach to retail leasing has had to change too, Rami Kotel said.
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“Our approach has changed in a big way. The types of tenants we look for are different now, more service-related tenants like restaurants, doctors, salons and fitness types,” Rami Kotel said.
Kotel Investments’ retail properties are experiencing an average of 97 percent occupancy. While the company handles leasing for its properties, it announced in April that Cindy James of NAI Partners will manage six of its San Antonio retail properties.
By Ryan Salchert – Reporter, San Antonio Business Journal
April 16, 2018
Kotel Investments Inc., a real estate investment company with offices in Southern California and San Antonio, tapped Houston-based NAI Partners’ landlord services division to manage its San Antonio retail portfolio.
NAI Partners, in turn, assigned the six-property, 205,000-square-foot portfolio to Cindy James, a San Antonio-based property manager who has been in commercial real estate for more than 20 years. James comes to NAI Partners from Endura Advisory Group, where she had a similar role and responsibility over Kotel Investment’s portfolio.
The new portfolio, which includes such retail centers as 1546 Babcock and 12066 Starcrest Drive, nearly triples the amount of space under management for NAI Partners in the San Antonio market.
The company’s initial foray into San Antonio property management was Marymont Office Park, which the company’s investment fund bought last fall.
Earlier this year, NAI was named the exclusive broker for Rockport Terminals, a 230-acre industrial site with access to rail, water and multiple highways in Corpus Christi. As reported in December by the Business Journal, San Antonio oil and gas entrepreneur Clayton Reaser and partners, including Ed Nelson, are behind that redevelopment, which is one of the largest parcels available in the Port of Corpus Christi area. A three-man team at NAI Partners — John Ferruzzo, a partner who heads the firm’s industrial group; Nick Peterson; and Ryan Searle — and local expert Blue Brooks of NAI Blue Market are the industrial sales professionals marketing the listing.
Date: June 17, 2016
San Antonio hits the sweetest spot when it comes to homeownership across the country
By: Katie Burke
What can you find at the intersection between job growth and the point when a buyer breaks even on a home purchase? It’s what Zillow calls the homeowner’s sweet spot, and according to the Seattle-based research firm, San Antonio’s residential market lands squarely in the middle of it, ranked No. 1.
San Antonio is one of the best markets in the country when it comes to owning a home due to its strengthening labor market and short “breakeven horizon” — how long home buyers need to stay in a home before buying it makes more financial sense than renting.
New buys renew Kotel Investments’ focus
Kotel Investments Inc. recently closed on the purchase of three retail centers in North Central San Antonio.
The buys represent the firm’s renewed focus on San Antonio’s retail industry, said brothers and Kotel co-founders Rami and Jeff Kotel.
Rami and Jeff Kotel have built their firm with a focus on establishing partnerships with their tenants.
As part of that mission of putting the tenant first, they have begun rehabbing all the properties — an investment that is already reaping rewards for Kotel Investments, which is dually headquartered in San Antonio and Woodland Hills, Calif.
“We’re getting calls twice a day,” …
Kotel Investments buys retail properties
in far Northeast San Antonio
Date: Feb 8, 2013
Real Estate Round Up
Kotel Investments’ properties pumped up by leasing activity
Kotel Investments pumping up its industrial portfolio,
while Gold’s Gym looks to pump up San Antonio
Date: May 26, 2012
KOTEL ACQUIRES STARCREST INDUSTRIAL PROPERTY
SAN ANTONIO — Kotel Investments has purchased a 40,330-square-foot industrial property, located at 12066 Starcrest Drive in north central San Antonio. The property consists of five tenants, including Soccer Factory and Ducati of San Antonio. Joshua Swank of Alamo Real Estate Brokers represented the buyer in the transaction.
Date: Friday, March 2, 2012
Kotel Investments, Inc. has announced a new tenant at one of its industrial facilities.
Husband and wife team Daniel and Michelle Hagerty have opened the Metroflex Gym San Marcos. The gym is located in a 12,500-sqaure-foot industrial building that is owned by Kotel Investments, at 1942 Interstate Highway 35, in San Marcos.
Metroflex is an Arlington, Texas-based chain that bills itself as a “hardcore training facility” – one with its roots in catering to power lifters and body builders, explains Michelle Hagerty. She and Daniel, however, have also added some features to their franchise location – including group fitness classes, massage therapy and a day care center.
“It’s really a neat concept,” adds Rami Kotel, who co-founded Kotel Investments with his brother Jeff. Their firm is dually headquartered in San Antonio and Woodland Hills, California.
News Brief 12-6-11
KOTEL INVESTMENTS ACQUIRE INDUSTRIAL FACILITY IN AUSTIN
AUSTIN – ABKOT Properties, a subsidiary of San Antonio-based Kotel Investments, Inc. has acquired a 15,900-square-foot industrial facility, located at 13802 Turbine Dr. in Austin, for an undisclosed price. The property is currently occupied by CenTex Door & Frame. Kotel was self-represented in the transaction, and Mark Minchew of RE/MAX’s Austin office represented the seller.
Investment group is turning tenants into building owners
Brothers Rami and Jeff Kotel are out to spread the good news about San Antonio. And to infuse some more capital into the city’s real estate market. Jeff and Rami are the founders of Kotel Investments Inc. – an investment firm that is dually headquartered in San Antonio and Woodland Hills, Calif. To date, the brothers own about 300,000 square feet of industrial space, both here and in the city of Austin, says Rami Kotel. And they are looking for more. It is the role of Kotel Investments to bring investors – primarily California-based entities – to the deal-making table. Each property in the Kotel portfolio is owned via a joint venture that includes the Kotel brothers.
The challenge right now is finding investment-grade properties in the Alamo and Capital cities, because current owners of those properties don’t want to let go of them absent a premium price. “It’s slim pickings,” says Rami Kotel. Owners are holding fast to their asking prices, which has resulted in a standstill between potential buyers and sellers. “We are searching for investments,” adds Jeff Kotel. “we have to really, really search hard.”
But the work, the brothers say, is worth it – to have a stake in well-performing cities like San Antonio. “Everywhere else, the market is going against (rela estate investors), Rami Kotel says. “People are moving to Texas, and San Antonio especially, from every other state.”
The bullish outlook that the Kotels have for San Antonio is a trait that runs in their family – including in their uncle, local developer Efraim Abramoff. It is Abramoff who convinced Jeff and Rami that San Antonio is a good market in which to invest. Abramoff is the president of development/investment firm Ariel Texas Star Inc. Adds Rami Kotel: “We took his advice, and we have been focusing on San Antonio ever since.”
In fact the brothers continue to work with their uncle on some local projects – including retail center the Shops at Churchill Estates. The owner of the retail center is EA Partners, an entity that includes Jeff and Rami Kotel and Abramoff. To date, teh Shops at Churchill is 80 percent leased. That figure includes a trio of new leases that were recently signed for tenants Lizzy’s Gift & Bridal, home-decor buisness Gracious Living; and Blend, a new arrian in San Antonio that specializes in smoothies and nutritional supplements. Rami Kotel expects that the Shops will be 100-percent leased by this summer.
The challenge is creating the right tenant mix.
Adds Rami: “We’re not looking at the next 12 months, we’re looking three to five years into the future.”
In the meantime, the brothers will continue to spread the word about two of the strongest cities on the real estate landscape today.
Says Rami Kotel: “Our job is to bring investors (from California) to San Antonio and Austin.”
Randy Lee of McAllister & Associates represented the seller. James Erdeljac of Re/Max River City represented the buyer.
Please refer to CoStar COMPS #1513681 for more information