For the first time, ownership in a piece of the Pearl will be possible in the coming years.
Silver Ventures, the parent company behind the successful mixed-use development, has plans to invite investors to its future real estate projects, a move that its leaders say will keep those projects going at full speed.
Bill Shown, CEO of Oxbow Development Group, a subsidiary of Silver Ventures, announced the program at a recent meeting of the Real Estate Council of San Antonio, an industry trade group.
“We’re now going to be using third-party equity,” Shown said. Silver Ventures will fund land acquisition and take on the primary risk for its projects, he added, but the firm won’t be the sole investor as in the past.
The program will launch sometime in the fall, he added, with more information provided at that time about minimum investment and other details.
Silver Ventures CEO Bryant Ambelang also is confident in the offering.
“These are fully vetted business concepts that have fantastic returns, particularly at Pearl,” he said. “We think the world absolutely wants in on the development work that Bill and his team have done,” he said.
Though Silver Ventures has invited equity partners in its other, non-real estate businesses, he said this will be a first for the company’s development projects under Oxbow.
Additional equity is needed to allow the developer, formed as a separate entity in 2022, to move forward on its projects and for its parent to continue investing in other areas.
Founded by Kit Goldsbury in 1995, Silver Ventures has a portfolio that includes food and beverage, hospitality and cattle. The firm sold its interest in the produce company NatureSweet last year.
“As a venture capital firm, we need to be diligent about not having too much concentration in any one investment,” Ambelang said. But the firm also does not want to hold Oxbow back, he added.
“We want them to run so they can still provide the returns back to Silver Ventures,” he said. “They can still meet their commitment of creating beautiful places and beautiful spaces, and they can get a financial return.”
For now, those places will be located only in San Antonio, a city where Ambelang said there is a lot of opportunity. While Silver Ventures is often approached by other cities and groups looking to replicate the Pearl, there are no other projects elsewhere on the books, Ambelang said.
As for how much Oxbow is looking to raise through third-party equity, Shown said, “It’s a lot.” The developer has about seven projects that will be offered to potential investors.
“I can say that we have about $600 [million] or $700 million worth of projects in the hopper, and you can do the math: If lenders are willing to lend 55%, then 45% of that number” is needed from investors.
The list does not include any projects to be built on land the company acquired in Southtown in early 2018.
But adding outside investors to its development work changes the equation for Oxbow and the due diligence that’s required amid uncertain economic conditions, Shown said.
While industry watchers are looking for interest rates to drop in the coming year, financing remains pricey and construction costs are still up.
“We’ve got to get these things to pencil, not to the satisfaction of our parent but to the satisfaction from the outside world,” Shown said. “It’s going to be really interesting.”