San Antonio Day 3 "Vistana"

This award winning building project is beloved by both the city and it's citizens. It is one of the best examples of classy downtown living in San Antonio. Developer Ed Cross gives us the tour as he details his experience both with this building and as a developer. Speaking of experience Cross says the "ability to use numbers is critical and how you apply them is important." He says San Antonio is generally "10 years behind everywhere else" in terms of development. His background is in office development, and he values the "war stories" he has gained. He describes his early investment style as "promiscuous" and bought up everything he could put his hands on! He discovered that offices and warehouses had much lower "cap- ex" than other investments, and "lower is better!" He found that parking garages had the lowest cap-ex and therefore started out Vistana as a parking garage project. He describes the complexity of vertical development because of the difficulty of column and elevator placement. There are four jobs of the developer, Cross says, "conception, negotiation of land, architecture, and finance." For the Vistana, Cross got "Fixed-Rate 6%, permanent, 35% down, 30 yr., 10 yr.term amortization" on his loan. His pro-forma gave him a 7.5% return, which was pretty low at the time. At the end of the prject, his numbers turned out very favorably with a 12% IRR. His total "all in" hard and soft costs came to 60 M. He feels good knowing that with the park view and historical buildings nearby, his values will continue to improve. He envisioned a true loft-style building, and found creative ways to find "focus groups" to discover what people were really looking for in a "modern loft" feel. I thought he did a good job. Personally, what I generally don't like about lofts is that they expose too much, leaving a very industrial feel. Cross left some, but painted over the ceiling, making the loft feel like home. Good balance, I thought.