Equity Funding Secured to Acquire Site for Long-Awaited Redevelopment Project on San Antonio's East Side
Transformation of Former Friedrich Air Conditioning Complex into Mixed-Income Housing Will Serve as Catalyst for Revitalization Along San Antonio's East Commerce Corridor; $10.6 Million Investment from American South Real Estate Fund Commences Phase-1 Redevelopment
SAN ANTONIO, Aug. 13, 2020 /PRNewswire/ -- Despite the economic challenges due to COVID-19, funding has been secured to acquire and begin transformation of the long-shuttered Friedrich Air Conditioning complex in San Antonio's East Commerce area into a 347-unit mixed-income multifamily housing development. Half (174) of the units at the new Friedrich Lofts will serve low- or moderate-income families.
The American South Real Estate Fund (ASREF) -- an impact fund focused on revitalizing distressed communities throughout the South -- today announced that it has closed its largest investment to date, providing $10.6 million in equity necessary to fund the $68 million Friedrich Lofts project.
After many years of planning, the funding announced today will finally enable site clean-up and demolition to begin later this year, and construction to begin in early 2021. Situated on about six-acres less than two miles from downtown San Antonio, the former air conditioning plant at 1617 E. Commerce Street has been a source of blight for the neighborhood since it shut down more than 30 years ago. The new Friedrich Lofts development will transform the dilapidated and environmentally challenged site into much-needed workforce housing for the East Side community. Apartments will range from 625 square-foot efficiency units to two-bedroom units with just over 1,000 square feet.
"We are proud that Friedrich Lofts becomes our fourth investment in San Antonio for the American South Real Estate Fund and our affiliated funds," said ASREF Managing Partner Deborah La Franchi, who also serves as founder and CEO of SDS Capital Group. "Along with Friedrich Lofts, our investments in Haven for Hope, Lighthouse for the Blind and the San Antonio Food Bank all generate much needed economic opportunity."
Ms. La Franchi further underscored the types of impacts ASREF envisions from the Friedrich Lofts project. "The plant closure not only eliminated 600 jobs for San Antonians – it delivered a debilitating economic blow to the community. Today, boarded up retail and manufacturing still plague the commercial corridor, contributing to a tragic 36% poverty rate The Friedrich Lofts development will be an economic catalyst that reverses this decline and creates opportunity for the local community."
Redevelopment of the Friedrich Air Conditioning site has been planned for many years, but funding has always been a challenge. Despite the current financial situation due to COVID-19, the American South Real Estate Fund is providing the final portion of equity required to move the project forward. The Fund's two-tiered investment provides predevelopment capital to acquire and remediate the site and equity to facilitate new construction.
ASREF Co-Managing Partner David Alexander added, "We are excited to invest in a high-quality development that addresses the East Side's lack of workforce housing and furthers the mission of the San Antonio Housing Trust."
The project is a public-private partnership between Dallas-based Provident Realty Advisors Inc. (Provident), the San Antonio Housing Trust Public Facility Corporation (SAHT), and American South Real Estate Fund as equity partner. It is also supported by approximately $1.7 million in funding from the City of San Antonio's Inner-City Tax Increment Reinvestment Zone, as well as City permit fee waivers and San Antonio Water System impact fee waivers.
Provident will undertake development via a 75-year ground lease with SAHT. The lease ensures that half of the multifamily units will be designated for low- or moderate-income families making less than 60% and 80% (respectively) of area median income (AMI). The project will also create nearly 250 construction related jobs.
Provident Executive Director Dave Holland stated, "We are continually seeking opportunities to serve a broader market with Class-A projects through innovative partnerships that allow this much-needed type of housing where it is needed most."
Pete Alanis, Interim Executive Director of the San Antonio Housing Trust, noted that the Friedrich site has been a longtime priority for East Side residents. "There have been many attempts over the years to redevelop the site and transform it into a catalyst for East Side revitalization," he said. "We are excited to partner with Provident Realty Advisors and the American South Real Estate Fund to finally bring this high quality mixed-income residential project to fruition. The equity ASREF brought to the table was critical to closing this investment. We really struggled to find equity investors willing and able to fill this gap, and ASREF provided the type of subordinated equity capital we needed to make all the other funding sources work."
The Friedrich Lofts project has earned unanimous support from San Antonio officials, as well as strong support from Eastside residents. Councilwoman Jada Andrews-Sullivan, who represents District 2, underscored how the development will build on existing momentum to improve life along a major corridor that feeds into the City's Central Business District. "It brings me joy and pleasure to finally see the Friedrich complex begin the transformation to a mixed-income, multi-family residential development. The development brings to fruition a vision of affordable housing to the Eastside of San Antonio. Working class people will be able to live near their jobs downtown."
About American South Real Estate Fund
The American South Real Estate Fund (ASREF) is a real estate impact fund focused on investing in transformative projects in 10 states across the Southern U.S. It is a joint venture between Los Angeles-based impact fund manager SDS Capital Group (sdsgroup.com) and Shreveport, Louisiana-based property developer/manager Vintage Realty Company (vintagerealty.com). ASREF provides JV equity, preferred equity and mezzanine debt to third-party real estate developers. As an impact fund, it seeks to finance projects that positively impact low-income and moderate-income communities in need of economic and community development. For more information, visit asref.com.
About Provident Realty Advisors
Provident Realty Advisors is a privately held real estate and investment firm that seeks to provide exceptional risk-adjusted returns to its investor partners through superior development of opportunistic and value-added strategies. Since its formation in 1991, Provident has developed or invested in more than $3 billion worth of real estate projects. Provident has thrived over the years by adapting to shifting demands and trends in real estate and has developed expertise in a variety of real estate disciplines. In multifamily, Provident has developed over 5,300 units of market-rate and affordable housing.
About San Antonio Housing Trust
Established in 1988, the San Antonio Housing Trust continues to provide partnerships and strategic investments for projects, programs, and initiatives with the aim of addressing critical community housing gaps through the production, preservation and protection of affordable housing.
CONTACT:
Erik Deutsch
(for American South Real Estate Fund)
(323) 851-2300 x112
erikd[at]excelpr[dot]com
SOURCE The American South Real Estate Fund (ASREF)
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