StoryBuilt's Pipeline Hits The Market

On October 9, 2023, A&G Real Estate Partners and Onyx Asset Advisors announced the marketing of Austin-based StoryBuilt's commercial and residential project pipeline. The now-defunct company, formerly known as PSW Real Estate, was a full-service developer involved with design, development, construction, sale, and property management. StoryBuilt entered into receivership in August 2023 with Stapleton Group serving as the third-party fiduciary. Included in the sale are three Dallas properties.

The diverse offering, with properties running from seven to more than 800 units, features:

• Fully complete multifamily residential and mixed-use projects in Austin that are already generating millions of dollars in net operating income.
• Partially or nearly complete commercial and residential projects in Austin and Seattle.
• Land parcels in various stages of approval—including several fully entitled projects—for construction of approximately 2,500 residential units across the four cities.

The sale offers investors a unique opportunity due to StoryBuilt's strategy. Mike Bergthold, managing director at Stapleton Group, spoke to the benefit of picking up a StoryBuilt project:

Known for its slogan "live where you love," Austin-based StoryBuilt earned a national reputation as a leading builder of attractive, contemporary real estate projects in some of the country's most coveted urban villages and communities. StoryBuilt's unique approach is all about finding cool neighborhoods first, and then building projects that meet people's needs and add even more vibrancy to the neighborhood.

Additionally, Bergthold acknowledged the potential reluctancy to acquire assets out of receivership:

 StoryBuilt's history, design skills and management talent are strong, as is its pipeline of well-conceived and located assets, but like many other builders in recent years, the company ran into capital constraints. For real estate investors, this truly is a unique and rare opportunity to acquire the entire company, inclusive of assets, people and quality brand and IP or the outstanding assets individually." 

While investors should take the word of a receiver, who is obligated to maximize the value gained from the sale, with a grain of salt, the opportunity to acquire shovel-ready projects should not be overlooked. Emilio Amendola, co-president of A&G Real Estate Partners, emphasized the potential for profits:

The availability of StoryBuilt's position in one or more of these 17 projects is an extraordinary opportunity for qualified developers. You're creating the opportunity to develop or complete these assets and receive substantial fees associated with things like construction, site work and construction management and supervision.

Additionally, the sale includes opportunities for smaller investors, including projects as small as six single family homes. Full details on the assets for sale can be found at this link.

As rising cost of capital threatens many investors, those with dry powder should be keeping an eye out for opportunities. Tighter financing, especially with regard to refinancing, means this is not likely to be the last major portfolio sale to occur in the near-future. An equity-heavy capital stack may be able to overcome current headwinds, allowing investors to reap rewards later. Catalysts for the "later" part could include, among many other things, lower interest rates following cooled inflation and increased confidence in regional banks, which are often the primary source of financing for real estate projects.