Brothers Rami, left, and Jeff Kotel have constructed a big portfolio of San Antonio retail facilities.
Two brothers dwelling in California have discovered a worthwhile area of interest investing in San Antonio’s neighborhood purchasing facilities.
Rami and Jeff Kotel, co-founders of San Antonio-based Kotel Investments, personal and handle almost 100 properties within the Alamo Metropolis and the encircling areas. Over the past two years, they’ve primarily centered on retail acquisitions due to rising demand in that sector.
“We search out these neighborhood purchasing facilities as a result of we’ve got a lot product in San Antonio that we’re capable of transfer tenants round primarily based on their wants,” Rami Kotel mentioned.
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Simply this month, the brothers bought three neighborhood retail strips and two Starbucks for an undisclosed quantity.
Kotel Investments bought a strip purchasing middle on Babcock Highway this month.
The three purchasing facilities are all on the Northwest Facet — one at 6563 Babcock Highway with eight tenant areas, two of that are up for lease; the second is simply 1.5 miles away, at 6330 De Zavala Highway, which has six tenants and one obtainable area; the third middle, which additionally has six tenants and one vacant area, is at 10203 Culebra Highway.
The Starbucks places are at 214 W. Bitters Highway on the North Facet and 8350 FM 78 in Converse.
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“Most of our properties are on the North, Northeast and Northwest sides of city,” Kotel mentioned. “There are a whole lot of newcomers coming in from different states, trying to open up their companies, and we see them leaning towards the North Facet of city, the place there are new houses are being constructed, good faculties and stronger leasing alternatives.”
Most of Kotel Investments’ properties, together with this newly acquired one on Culebra Highway, are positioned on the North, Northwest and Northeast sides of San Antonio due to the world’s development.
The Kotel brothers bought their first property in San Antonio in 2004 and have invested in solely business actual property within the Alamo Metropolis. They briefly relocated right here in 2006 to develop some properties over the course of a few years earlier than returning to California to be with their household.
“Since then, we’ve steadily grown our portfolio as a result of we worth each the power of the market and the nice relationships we’ve constructed with the folks over time,” Kotel mentioned.
Kotel Investments’ tenants are largely mom-and-pop companies, like hair or nail salons, together with church buildings and occasion facilities. If an area is vacant upon buy, they rehab it for the following tenant. Most of their upkeep contractors, like electricians, plumbers and HVAC corporations, are additionally their tenants — of their industrial properties.
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“A number of our tenants have been with us for greater than 10 years,” Kotel mentioned. “On a month-to-month foundation, we discover out what they want for development. For instance, we’ve got one church that desires to downsize and one other that should increase, so we’re swapping their areas. We’re very related to our tenants. They’ve our cellphones, and we’re very hands-on landlords.”
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Retail areas get snapped up rapidly in San Antonio, which is why the Kotel brothers proceed to closely spend money on the trade.
On the finish of 2024, San Antonio’s retail areas had been 95.2% occupied, the very best degree since Weitzman started monitoring the market within the mid-Nineties, in keeping with a biannual report from the Dallas-based business actual property agency. The Alamo Metropolis retail market has skilled wholesome occupancy of 90% or larger for 14 years in a row, the report reads.
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Kotel Investments additionally lately acquired a shopping mall with seven retail areas at 6330 De Zavala Highway on the Northwest Facet.
Kotel mentioned that round 98% of their retail areas are leased, and it sometimes takes solely 30 to 60 days to discover a tenant for a vacant area after they purchase a brand new property. Brokers typically attain out to the brothers first earlier than formally placing a retail middle available on the market as a result of they know the Kotels are all the time actively on the lookout for extra acquisition alternatives.
“There’s not a lot available on the market as a result of San Antonio is a good market to do enterprise in,” Kotel mentioned. “Neighborhood purchasing facilities don’t keep vacant for lengthy, which in flip creates extra demand. Over the past 10 years, retail has pushed ahead forward of commercial.”
