The 14-story Vistana apartment building in west downtown is about to be sold.
Its current owner, an investment partnership managed by developer Ed Cross, is currently in negotiations with a buyer. Cross, who declined to name the buyer and the list price, said the sale could be completed in June. The property, which rests on 1.3 acres on the southeast corner of West Houston Street and North Santa Rosa Avenue near El Mercado, was valued at $4.9 million this year by the Bexar Appraisal District.
“It’s been a profitable building,” Cross said. “And I will tell you, it’s like a child. I’ve had great joy and some sorrow owning that building over the many years.”
Ten years ago, the Vistana was the first spark in the apartment boom that has occurred since in the downtown area.
In 2009, Cross completed the Vistana, adding nearly 250 apartments in the form of a massive art deco building.
The Vistana was the first of its kind 10 years ago in terms of an apartment building of such magnitude, and there hasn’t been anything quite like it since. The apartment buildings going up of late have been typically a maximum of five stories with frames made of wood on downtown’s outskirts. The Vistana was a steal and concrete structure. And now, luxury apartment projects of similar size, such as the 13-story Durango on South Presa Street, the 17-story Floodgate on West Commerce Street, and the 24-story Villita Tower on Villita Street are under development in downtown proper.
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The Vistana was also the first indicator there was a demand for downtown housing. This was before the city launched its Center City Housing Incentive Policy (CCHIP) in 2012. When it opened in the spring 2009, the Vistana boasted an occupancy rate above 90 percent. Today, 92 percent of the units are leased, Cross said.
Before CCHIP, the Vistana received a 10-year abatement of city property taxes, a Chapter 380 loan worth $1.8 million and an estimated $666,300 in SAWS and city fee waivers.
Cross’ original intent was to build a parking structure, based on a city study at the time that concluded there was a demand for such a development in the western pocket of downtown. Then he added some retail, and some apartments, and the project morphed into what it is today—one of downtown’a largest buildings both modern and iconic.
“If I knew when I started this what I know now, I would have done not as much retail space, and probably would not have built as big a garage,” Cross said.
In interviews 10 years ago, Cross said the Vistana would have never been built if it were conceived just a year earlier, because of the 2008 financial crisis. It would have been impossible to find the equity to build it, he said then.
At the time, Cross also talked about owning the building for decades to come. In an interview today, Cross acknowledged the sentiment back then. He said having held the building for 10 years is longer than most developers hang onto their real estate progeny. After about three years, most developers sell what they build, he said.
“Fifteen years ago, when I first started thinking about this, I really had no idea of how it would play out,” Cross said.
The Vistana is in the middle of west downtown, which is expected to experience a boom of its own. Weston Urban, the development company backed by philanthropist and Rackspace co-founder Graham Weston, is currently co-developing the 23-story Frost Tower a block west of the Vistana. The company is also obligated to add 265 housing units to the area under the deal that resulted in the new Frost tower. It’s also been expanding its west downtown holdings with other purchases, such as the former Toudouze market building just west of Interstate 35.
Recently, Weston Urban CEO Randy Smith said the company’s strategy is to complement and align with the massive expansion the University of Texas at San Antonio is planning in the area over the next 10 years.
Of course, the $178 million San Pedro Creek renovation project, which runs a half-block behind the Vistana, is also expected to serve as a catalyst for more development growth in the area.
Cross and his partners know this, obviously, but decided to sell anyway.
“Understand that that growth is not just a point in time,” he said. “That growth is going to be over 4-5 years. Part of the decision we made is, ‘Do we sell it now or do we hold it for another five years and ride that wave?’ The decision was made to sell it now. There’s always a number of things going on … both with the building and individual partners that sometimes they come together and give you direction about what you should do.”
“We’re making good money on (the Vistana). There comes a point when (partners) are saying, ‘Ed, it’s been a good run it’s time to move on.’ ”