Endeavor Real Estate Lends $29M for Texas Mixed-Use Condominium Project
By Mack Burke September 27, 2018 11:14 am
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Endeavor Real Estate Group has provided PSW Real Estate with a $29.4 million construction loan to erect a mixed-use condominium project in Austin, Texas, Commercial Observer has learned.
Endeavor’s senior loan is non-recourse, sources told CO, although additional details on the terms of the financing were not disclosed. A Mission Capital Advisors trio of Jason Parker, Steven Buchwald and Jamie Matheny arranged the senior debt for PSW.
“Austin’s recent growth has been well-documented, and the area around this property has seen its population increase by a staggering 27 percent since 2010,” Parker said in a statement. He stressed the challenges of securing construction financing at this stage in the cycle, adding that the area’s insatiable demand as well as the strong sponsorship in PSW ultimately closed the construction debt.
The planned four-story, 86,700-square-foot development—to be located on a roughly 1.3-acre site at 1600 South 1st Street —will include 59 condominiums and 22,800 square feet of ground-floor commercial space as well as a 321-space subterranean parking garage. Construction is expected to wrap between the second and third quarters in 2020, PSW Project Manager Jarred Corbell told CO.
Corbell said that while PSW hasn’t yet moved to secure any tenants for the ground-floor commercial space, initial interest has been strong. The firm is planning to start officially marketing the commercial space in the next two weeks.
Of the 59 units, there will be six studios, 26 one-bedroom and 24 two-bedroom condos and three three-bedroom units, with rents that will be market rate, Corbell said. The property will also feature a private roof deck and a courtyard on the second floor. It was designed in-house by PSW.
While apartment yield spreads in the Austin market have been compressing slowly over the last few years, investment activity has remained robust, buoyed by strong fundamentals. Vacancies in the southern portion of Austin fell 70 basis points on the year to 5.7 percent in the second quarter while roughly 1,900 units came online, adding to the highest level of annual completions in the market in more than five years, as per data from Marcus & Millichap (MMI).
An official at Endeavor declined to comment on the transaction.
