Park at Westover Hills

Unique selling points

The partnership with GenCap offers REALIANCE relations the opportunity to invest with an institutional development partner in the growing state of Texas. GenCap has an excellent track record and is a long-term relationship of REALIANCE’s partners, with whom the first projects started in 2020.

San Antonio, one of the growth centers of Texas, is a metroplex of approximately two and a half million inhabitants. This city has an economic dynamic with relatively low taxes and costs of living as well as an attractive surroundings with a pleasant historic city center including the famous ‘river walk’. The metroplex has had consistently high population and employment growth in recent years as well as low unemployment of 4.3% at the beginning of 2023, resulting in an increasing demand for rental apartments.

The location of Park at Westover Hills is in the affluent and fast-growing Far West San Antonio. It is a stone’s throw from employment centers, schools, and shopping centers. The important western Highway 151 provides excellent access to downtown San Antonio and other major transit roads. From Highway 151, the complex is highly visible.

The complex has 372 sustainable Class A+ apartments, built with a mix of studios, one-, two- and three-bedroom apartments, ranging from 595 sq. ft. to 2,057 sq. ft. (average 910 sq. ft.). This targets a broad target group of potential tenants. The complex also has state-of-the-art facilities, such as a resort-style swimming pool, a pool plaza and a professional wellness studio.

The local partner is very experienced in the development of similar projects, mainly in Texas. In its existence, GenCap has developed almost 6,000 apartments in recent decades and projects sold have been successfully completed (15.5% IRR on average). In addition, GenCap enjoys a good reputation in its role as a real estate advisor for Dutch pension funds. They also participate substantially in the present development and a substantial part of their profit is subordinated.

This proposition offers a 19.4% share in the development of Park at Westover Hills. The opportunity to participate in the underlying project arose because the largest Limited Partner (International Capital), a real estate investment company with the same strategy as REALIANCE, is bound to a maximum participation for this proposition. This has created the opportunity for an additional Limited Partner. International Capital and the local partner will first contribute the equity. Because the REALIANCE participants join at a later stage, the lead time is shorter and therefore the ROI is higher. In addition, the REALIANCE participants benefit from an additional negotiated profit share from the local partner. Late entry also ensures that various risks in the initial phase of development are mitigated.

For the development of Park at Westover Hills, a gross total return of approximately 42.3%, or 16.9% per annum, is forecasted. Despite conservative financing with a leverage of 52%, a relatively high annual return can be forecasted as REALIANCE’s investors move in almost a year after the start of construction and will be allocated a share of the local partner’s profits. To date, the construction has been funded by the equity of GenCap and the Limited Partner International Capital LLC.