Woodbranch Management is moving forward with the redevelopment of a midrise office complex into apartments.
The Houston-based developer, headed by president Philip Schneidau, requested a zoning change to allow up to 845 apartments on the 13-acre site in northwest San Antonio, the San Antonio Business Journal reported.
The developer plans to redevelop the Highpoint One and Two office buildings at 8401 Datapoint Drive. Woodbranch hasn’t disclosed whether the development will involve converting the existing buildings or replacing them, but the project would mark a significant shift for the site, which has faced financial struggles in recent years.
Previously owned by Georgia-based Richmond Honan, the buildings were caught in a complex bankruptcy case after the ownership entity defaulted on $53 million in loans, primarily held by Capital One.
The drawn-out legal battle concluded late last year when Woodbranch, which already held the ground lease, assumed full ownership of the site. Financial records from February 2023 showed the property had monthly rental income of $588,000 and a year-to-date net income loss of $14.9 million.
San Antonio’s single-family home market remains one of the most active in Texas, fueled by rapid job growth and high demand for housing. However, the city’s multifamily market tells a different story.
With an oversupply of units, tenants are gaining more leverage, benefiting from increased options and competitive pricing. This imbalance has put significant pressure on landlords.
Those who also took out floating-rate loans on “value-add” assets before interest rates began increasing in 2022 have struggled to maintain financial stability.
A prominent example is multifamily syndicator GVA Real Estate’s recent struggles with the 335-unit Aspire and 285-unit Solara apartments on San Antonio’s North Side. The Solara, at 11710 Parliament Street, went into foreclosure after the company defaulted on a $56 million loan.
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Colorado-based DB Capital Management recently surrendered the 352-unit Summit at Salado Creek, at 12727 Vista Del Norte, via deed-in-lieu of foreclosure, after defaulting on a $45 million variable interest rate loan from Benefit Street Partners.
— Andrew Terrell
