October 2023 Newsletter

Oct 1, 2023 | Newsletters

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October—you can really start to see the end of the year from here. We’ve already
got everyone’s Halloween costumes figured out, and we’ll roll straight into
Thanksgiving and Christmas from there. Throw in the steady array of kids’ activities
and add in extra time spent following the Longhorns’ football season (so far so good on that front), and 2024 is going to be here before we know it.

Interest Rates and Housing

Between now and 2024, there is plenty of work left to do. Our winter preparation work will be wrapping up to better prepare our assets for those deep freezes we’ve had the last couple of years. And we’ll be monitoring the Interest Rate environment and the Federal Reserve’s final two meetings of the year—with the next one on tap for November 1. Their decisions and commentary around whether to raise rates again between now and the end of the year will be viewed with much interest in our office.

The higher (and longer) rates stay elevated, the more pressure it puts on homebuyers trying to qualify for a (new) mortgage. While high interest rates impact our borrowing costs, it also buoys rental demand as more people will opt to rent instead of buy.

Build to Rent

Build-To-Rent continues to be a large focus of ours and the broader market. This product type is anticipated to remain in high demand as interest rates and demographics create more demand for single-family style rentals. We are excited to be closing our first BTR project near the end of this month, with a plan to build 156- units and then refinance and operate them over 7 years.

Limited Spots Open for BTR Deal

If you are interested in participating, we have a very limited amount of space that has opened up. With a lot of recent headlines supporting the product type and continued growth in our submarket, we’re more bullish today than we were when this initially launched—here are some of those updates. Commitments to fill this final piece will be taken on a first-come first-served model. Click below to see the full project details in our Data Room.

If you have immediate questions please reach out to Monet to get those answered.

We hope you enjoy the real start to fall this month!

With Gratitude,

Navigating the Changes, Challenges, and Opportunities in Austin’s Urban Development

This month, Cooper Drenner guest wrote a blog article to share his insight and perspective on rezoning real estate in Austin, Texas.

Growing up the son of a land use attorney, I’ve had a front-row seat to the transformation of Austin, Texas over the past three decades.

On Thursday nights I’d secretly tune into my dad’s city council hearings with the volume muted. It was during those moments that I realized how the individuals in that room could shape the essence of our city.

As Austin evolved over time, my curiosity about how urban development was shaping my hometown grew too. And now, here at Wildhorn, I’m still on that journey, making sure our assets align with Austin’s ever-changing land needs…

Our Top Picks: Real Estate and Economic Resources Worth Exploring

Podcast: Cooper Drenner joins Whitney Elkins-Hutten to talk about his strategic approach to acquisition, deal structure and the importance of partnerships.

Webinar: Pensford hosted their Q3 2023 Interest Rate webinar, which covered rate forecasts, the start of rate cuts, fixed vs. floating, falling cap costs and whether or not there will be a recession.

Article: In this article from The Chief Economist, we learn five key perspectives in the Outlook for U.S. Commercial Real Estate.

Property Posts: Catch Up on Apartment Happenings!

St. Mary Apartments Had The Pleasure Of Hosting Wild Heart Yoga For A Rejuvenating Yoga Session. Abd Throughout The Month Of September, The Shiloh Collected New And Gently Used Shoes In Support Of Soles4Souls!

St. Mary Apartments: St. Mary Apartments had the pleasure of hosting Wild Heart Yoga for a rejuvenating yoga session.

Shiloh at Oak Hill: Throughout the month of September, the Shiloh collected new and gently used shoes in support of Soles4Souls!

Central Texas News: The Latest Economic Developments

Austin-San Antonio corridor prepares for population growth:

Economic leaders from both cities met at an annual summit to talk about the expected population grow along the corridor, and what it means for residents and businesses.

Key Takeaway: The Austin-San Antonio corridor is expected to add 4 million people by 2030, and will be one of the fastest growing megaregions in America.

New Kyle Hospital Announced:

St. David’s will build a $300 million, seven- story hospital as part of the hospital’s expansion plan.

Key Takeaway: Kyle, recently ranked the third fastest growing mid-sized town in the country, is part of the suburban sprawl happening south of Austin. The expansion and investment from the medical sector is a clear indication of the town’s growth.

Oracle Could Expand:

The company has plans to move-forward with its Austin HQ expansion, and outlined plans for a 255-room hotel.

Key Takeaway: Oracle already has a significant presence in Austin, and owns approximately 50 acres on the southeast shore of Lady Bird Lake. In a time when the future of office space is uncertain, Oracle plans to lay deeper roots in Austin.

Brodie Oaks Is Reimagining Redevelopment:

This shopping center in South Austin has received the official green light from City Council and expects to break ground in 2025.

Key Takeaway: This 1980’s strip mall is being reimagined as a mixed-use, vibrant open space. What makes makes it unique is the plan’s ecological focus and balanced approach to growth. As Austin continues to become denser, it will be important to think outside the box with redevelopment.

Deep Dive: Older Multifamily Properties Achieve Above-Average Rent Growth

According to the CBRE research, investors should pay close attention to older multifamily properties. Over the past decade, properties constructed before 2010 have experienced an impressive average annual rent growth of 4.6%, surpassing the 3.4% growth rate of post-2010 assets.

This can be attributed to the fact that pre-2010 properties have lower average rents, allowing for significant growth in a continuously high-demand housing market. Additionally, the rent growth of older properties has shown to be more stable and less susceptible to external shocks such as recessions.

Like what you see? Don’t miss out on future insights! Subscribe to Wildhorn Capital’s Monthly Newsletters for exclusive updates and expert analysis. Join our community of informed subscribers today.

Andrew Campbell
Written by Andrew Campbell

Andrew Campbell is a native Austinite and Managing Partner at Wildhorn. He is a real estate entrepreneur who first broke into the business in 2008 as a passive investor. In 2010 he transitioned into active investing and management of a personal portfolio that grew to 76 units across Austin and San Antonio. He earned his stripes building and managing his personal portfolio before founding Wildhorn Capital and focusing on larger multifamily buildings. At Wildhorn, he is focused on Acquisitions and maintaining Investor Relations, utilizing his marketing and communications background to build long-term relationships.

Case Study: Baxter at Westwood

Learn about how Wildhorn transformed a multi-family property and successfully exited after two years.

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Baxter at Westwood

Learn about how Wildhorn transformed a multi-family property and successfully exited after two years.