Shippy Property Management
Shippy Property Management – “Property Problem – Water Outage – Pipe Burst,” read a note taped to a cracked window in the moldy laundry room at Vista Del Rey Apartments, owned and operated by Shippy Properties. Credit: Waylon Cunningham / San Antonio Report
While investment firms from Austin and other cities are selling apartment complexes in San Antonio at breakneck speed, efforts to raise rates of return have created problems and even dangers, residents say.
Shippy Property Management
The fastest-expanding buyer in the city is an Austin investor-landlord company called Shippy Properties, according to real estate data.
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The stated strategy of David Shippey, the company’s founder and CEO, who in 2019 wrote a book detailing his wealth formula, involves buying up working-class apartment complexes, cutting maintenance costs and charging tenants new fees.
For tenants living in the more than 4,000 apartments he owns in San Antonio, these cost-cutting measures come at a price.
Sarah Matthieu lives with her daughter and 10-year-old granddaughter at the Star Club Apartments, a complex built in 1975 at 8800 Starcrest Drive in northeast San Antonio. Shippy Properties acquired the complex in 2018.
In Matthieu’s room, water was leaking from the closet and under the sink, her family said. Her daughter, Mercedes Merritt, said she told the complex about the water problems, but nothing was done. According to her, one rainy day on July 10, Matthieu and her granddaughter were napping when the ceiling collapsed on them. Her son dug them out from under the rubble.
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Sarah Matthieu sits in the living room where she says the ceiling collapsed on her and her grandson over the summer. According to her, the management ignored the request to eliminate the leaks. Credit: Waylon Cunningham / San Antonio Report
“We almost died in the accident,” said Matthieu, who continues to receive medical treatment for her injuries. She is most worried about her granddaughter, who she says has injuries to her neck and back, but has received little to no treatment. “She doesn’t understand that as she gets older, it can really bother her,” she said.
Matthieu is not the only tenant who has had issues with Shippy Properties management. Around the same time her ceiling collapsed, KENS-TV reported that residents of the same complex said management was unresponsive to hot water outages, leaks and electrical problems. Another tenant told KENS that her apartment flooded so many times that the roof caved in.
Roberto Bernal, chief operating officer of Shippy Properties, said the company is committed to improving the quality of its apartments, some of which “need some TLC.”
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There were other complex maintenance issues under Shippy Properties. County records show a painting contractor filed a lien against him for nonpayment. The bond was settled a few weeks later.
The City of San Antonio Department of Development Services cited the property for lack of repairs to the building following a fire that claimed the life of a woman in October 2020. More than a year later, the building remains empty and derelict.
Two months after the KENS story broke in September 2021, Shippy Properties sold the complex to another real estate company in Austin. He is now trying to evict Matthier and her family for alleged non-payment of rent, which Merritt is contesting.
Star Club’s new owner, GVA, was the city’s second-biggest apartment buyer last year behind Shippy, with 1,551 units, according to commercial real estate analytics firm CoStar.
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The data shows that the biggest apartment buyers last year, including GVA and Shippy Properties, focused on cheaper and older apartments — so-called “Class B” and “Class C” apartments, which are typically rented by firefighters, teachers and blue-collar workers. Data from analyst firm Yardi Matrix shows that such apartments accounted for 89% of units purchased for the top four buyers in 2021.
Their focus on apartments rented by working-class tenants ran counter to broader market trends. Below these four largest buyers, new and more expensive apartments rented by professionals – “A” complexes – make up a little more than half of all purchased objects.
Those trends played out last year, when the city saw an unprecedented volume of apartment deals, as previously reported by the San Antonio Report, where investment firms traded billions of dollars along with ownership of about 1 in 7 apartments. Investor interest across the country is being driven by the fact that the tenant class is growing, but there is not enough new construction to match. For every three new leases signed, there was approximately one apartment built and ready for rent.
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Of the roughly 18,000 units sold last year — double the number in pre-pandemic 2019 — less than 4 percent went to San Antonio firms, according to Yardi Matrix data. Austin-based companies led the charge, followed by New York-based companies.
Shippy Properties’ interest in older, lower-rent apartments is one of many business practices outlined in Shippy’s founder’s book, which describes how he started the company just over a decade ago with his wife, Leslie.
David Shippy writes that B and C real estate deals have always yielded “far more than double-digit returns” for him. That’s not just because of the lower purchase price, but also because of the tenant base — “households living in Class B and C properties typically can’t afford to own a home or live in Class A properties. So you have a captive audience.”
A nurse and other tenants gather at the Vista Del Rey rental office to discuss problems at the complex and eviction notices they believe are false. Tenants say that the administration hardly reacts. Credit: Waylon Cunningham / San Antonio Report
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One way to cut costs, he wrote, is to try to do all the maintenance yourself, rather than hiring contractors, and to “search for the lowest prices on expensive items like appliances, lighting, plumbing and paint.” »
This approach seems to have paid off for Shippy. “Investing in apartments has changed our lives,” he wrote. “We now lived in a multi-million dollar home, had an additional new beach house, drove brand new Mercedes and Porsche cars and took exotic vacations with the family several times a year.”
Shippee also writes that his philosophy is to “fix things, turn apartments into homes, and build safe and quality communities.”
But the tension between that philosophy and Shippy’s other advice, such as buying the cheapest equipment to maintain, is illustrated by the problems described by Vista Del Rey apartment tenants.
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Shippy Properties has owned and operated Vista Del Rey Apartments in Leon Valley since April, when it bought the complex for $46 million from GVA, which itself bought the property just two years earlier for $38 million from a New Jersey investor. The estate is old — built in 1979 — and large, with 453 units. The complex is Northwest Bexar County’s third-largest property tax payer, according to county records.
Miguel Martinez, Liana Calderon and daughter Jaelyn Martinez stand in front of their sandbags at the Vista Del Rey Apartments, owned and operated by Shippy Properties. The couple says that when it rains heavily, water pours out of the toilet and floods their house. They say management promised to fix the problem almost a year ago, but despite their persistence in pushing the issue, nothing has happened. Credit: Waylon Cunningham / San Antonio Report
Liana Calderon and Miguel Martinez, two Amazon workers, stood outside their sandbagged home with their young daughter. The couple said that when it rains hard enough, water comes out of their toilet and floods the apartment with several inches of water. Someone from the front office came the first time this happened and said nothing. There isn’t much furniture in their apartment except for a wooden dining table and a few chairs, as anything nicer than fabric tends to spoil quickly. “What’s the point of buying furniture?” said Martinez.
The couple initially said they wanted to move the units, but management demanded a fee. Now they just want out.
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At the other end of the complex, a small group gathered outside the rental office with eviction notices said to have been filed in error.
One resident, Crystal Gale, said she was confused because she was approved last month for tenant assistance payments, which are given to landlords to stop evictions due to the pandemic. Hale said her long-dripping bathroom ceiling recently fell on her cousin, revealing mold.
Ryan Barrios joined the group with his own late payment report, and he got angry. “Paying for it is not a problem. I can pay that,” he said. “But how am I supposed to talk to them if they don’t answer the phone or come to the door?”
Barrios said he would like to see management address the problem of not having functioning mailboxes, which tenants say has been going on for nearly a year. The mailboxes are so damaged that they do not allow
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