Local Developer Begins 236-Unit Phase I
HOUSTON-Following receipt of a $26 million construction/permanent loan, local developer Long Reach Associates Ltd., operating under the name Dunlavy Development Phase I LLC, launched construction on the first phase of its Fairmont Museum District. The 236-unit first phase is anticipated for completion in late 2007 or early 2008.
The project is situated on 2.7 acres at 4310 Dunlavy St. and Live Oak Capital Ltd. Production officer Jim Kirkpatrick tells GlobeSt.com that decision on a second phase will take place once plans are firmer for the Houston's Metro rail line. "Depending on what Metro does, there may be a retail component in the second phase, along with residential," says Kirkpatrick, who helped obtain $26 million in financing for the project's first phase.
In the meantime, he continues, the first phase is an ideal area for high-density residential housing, as it sits at the corner of Richmond Avenue and Dunlavy. "They have a property that is literally five minutes from the Medical Center, five minutes from downtown, five minutes from Greenwood Plaza, and a couple more minutes after that gets you to the Galleria," he says.
The location and developer reputation were two reasons why obtaining financing wasn't too much of a hardship, he says. Live Oak Capital correspondent lender Guardian Life Insurance Co. of America in New York provided the construction-to-perm loan because "they brought the best combination of proceeds and interest rate," Kirkpatrick notes.
The loan itself is a 24-month construction loan rolling into 20-year permanent financing with a split amortization of 25 years for the first 10 years and 20 years for the last 10 years. The fixed interest rate is 137 basis points over 10-year Treasury notes.
Local architect Steinberg Design Collaborative LLP designed Fairmont Museum District's first phase, while Davis Brothers Construction Ltd., also in Houston, is the general contractor. Long Reach Associates will handle leasing and management.