Investor Dilemma

When comparing single-tenant NNN properties to mixed-use developments in the Austin and San Antonio markets, investors are faced with a dilemma. In Austin, single-tenant NNN properties are yielding cap rates of 5-6%, while mixed-use developments are offering 6-7%. In contrast, San Antonio's single-tenant NNN properties are generating cap rates of 6-7%, with mixed-use developments yielding 7-8%. Lenders in Austin are more aggressive, offering 80% LTV, whereas San Antonio lenders are more conservative, offering 70% LTV. Investors are walking away from deals with high vacancy rates, inadequate parking, and outdated infraastructure. The decision ultimately comes down to risk tolerance and investment gols. Austin's single-tenant NNN properties offer stable, low-risk returns, while San Antonio's mixed-use developments provide higher potential returns, but with increased risk. By carefully evaluating these factors, investors can make informed decisions that align with their portfolio objectives.