New York Developer Snags $55.5M Financing Package for Dallas-Area Apartments
By Matt Grossman August 14, 2019 5:52 pm
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JLJ Capital has led a $55.5 million financing package for a project to build the second phase of a multifamily development near Dallas, the lender announced this week.
The deal, announced this week, brings together a trio of lenders to fund the construction of phase two at Dolce Twin Creeks, set to become a 366-unit garden-apartment complex in Allen, Texas, a northern suburb of Texas’s third-largest city, just north of Plano. The financing consists of a $45.5 million senior mortgage split between JLJ and BridgeInvest, a Miami-based private investor, as well as a $10 million mezzanine portion from Cottonwood Communities, a Texas landlord.
The short-term debt is designed to precede a more permanent loan that the builder, Sovereign Properties, would seek during the lease up. Jonathan Lewis, JLJ’s founder, said his firm was attracted to the opportunity to invest in the early stages of a high-end multifamily project in a growing market.
“These are really upscale garden apartments, in that the complex has a rec facility, a pool and a gym,” Lewis said. Allen, Dallas and the whole Texas market is growing tremendously, and they need more rental housing because the job market is strong there and continues to grow.
The presence of the project’s already online phase one component made underwriting simpler, the lending executive said. “We had very good comps,” he explained.
The two project phases will be operated independently and maintain separate amenities, but they share a broadly similar design. Rents at the development’s first phase start at $1,165 per month for a 775-square-foot one-bedroom unit, as per Apartments.com, and rise as high as $2,090 for a nearly 1,500-square-foot three-bedroom apartment.
Sovereign is a New York City company that specializes in constructing and managing multifamily complexes in Texas. It plans to complete Dolce phase two by the end of next year, and has announced that the project will also include a 15,000-square-foot commercial building designed to be leased to a medical office. The landlord’s suburban-first portfolio also counts concentrations of assets in Mansfield, Texas, another Dallas suburb, as well as in the Houston suburb of Katy.
In the years since the Great Recession, the Dallas metro area has indeed grown at a blinding pace: Regional GDP has boomed 50 percent between 2009 and 2017, to $535.5 billion from $357.12 billion eight years earlier. And the hub’s northern Plano suburb has enjoyed growing status as a magnet for big business. Toyota announced five years ago that it would move its North American headquarters to the city, bringing with it about 4,200 jobs, as per the Dallas Morning News.
Other giant corporate newcomers to Plano include J.P. Morgan Chase, Fannie Mae and Liberty Mutual. Caffeine fiends can also find the headquarters of Keurig Dr Pepper there.
Representatives for Sovereign didn’t respond right away to an inquiry.
