Capitol Quarters apartments in downtown Austin repossessed by lender
A lender has taken possession of a downtown Austin apartment mid-rise 13 months after tenants moved in, according to an announcement from the developer.
Churchill Real Estate Holdings recently secured a deed in lieu of foreclosure for Capitol Quarters, which took a unique approach to workforce housing in the city’s urban core. The lender repossessed the building at 1108 Nueces St. from developer Weaver Buildings LLC.
Capitol Quarters offered downtown living with roommates — a business plan intended to provide much needed housing to the many professionals struggling to find affordable housing in an area that’s short on all housing types. Capitol Quarters had lower rental rates than typical downtown apartments and no on-site parking.
Austin-based Weaver Buildings began work on the project in 2019 and broke ground in 2021. The first tenants arrived in August 2022, but leaders at the firm attributed struggles to maintain a high occupancy rate to a decrease in downtown activity in the wake of the Covid-19 pandemic.
A deed in lieu of foreclosure is an arrangement where a property’s ownership is voluntarily turned over to the lender to avoid the foreclosure process, according to the Consumer Financial Protection Bureau.
“We couldn’t have predicted the radical market changes the pandemic yielded,” Weaver Buildings President Jen Weaver stated. “I am proud of the integration into the existing walkable community and the new community that was created here. I will be watching to see how the building adapts to the future of Austin.”
A spokesperson from Churchill said the firm intends to hold on to the property and make updates to the properties amenities. Jen Weaver said current tenants were still in place at the property and leases were being honored, but could not comment further on the matter.
For tax purposes, Capitol Quarters was most recently appraised at $14.5 million, according to Travis Central Appraisal District.
Capitol Quarters is a 45,000-square-foot building a few blocks west of the Texas State Capitol. It has 30 three-bed, two-bath units, with unfurnished bedrooms offered at $1,200 per month and furnished bedrooms offered at $1,600 per month. Capitol Quarters also has 6,200 square feet of office space.
Those rental rates undercut those of more traditional downtown apartments. Average rent for one of downtown’s 16,800 apartments is $2,443 per month, according to ApartmentData.com.
Even with favorable rental rates, Capitol Quarters struggled to maintain high occupancy rates, with factors like the rise of hybrid and work-from-anywhere schedules making downtown living less attractive to tenants, according to Weaver Buildings.
“I would say the main [factor] was people not really needing to be downtown,” Jen Weaver said in an interview.
Though downtown office buildings aren’t as empty as they were during the worst days of the pandemic, occupancy still varies widely.
According to Kastle Systems’ Back to Work Barometer, which tracks office use across 10 major U.S. markets, occupancy rates for the Austin-Round Rock metro on Sept. 21-27 ranged from 41% on the lowest occupied day of the week to 71% on the highest, more than any other location. The average occupancy range for the 10 metros ranged from 33% to 59%.
This story has been updated with a comment from a Churchill Real Estate Holdings spokesperson.
| Rank | Prior Rank | Business name (Prior rank) |
|---|---|---|
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1 |
1 |
Journeyman Group |
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2 |
2 |
Alliance Residential |
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3 |
3 |
The NRP Group |
