Madison Realty Capital Provides $279M Loan for Austin Residential Portfolio
The financing covers a 425-acre residential community in the heart of Austin's northeast tech corridor, plus a condominium tower in Downtown Austin.
By Cathy Cunningham June 8, 2021 11:15 amreprints
Madison Realty Capital (MRC) has provided a $278.5 million construction loan for a portfolio of four assets located in Austin, Texas, Commercial Observer has learned.
The financing was provided to Reger Holdings, a New York-based, real estate investment and development company led by CEO Gordon Reger. The firm contributed significant cash equity in the deal.
Austin has been a beneficiary of increased investment both pre- and post-COVID. Now a perennial investor favorite, the city is experiencing explosive growth, supported by a diverse economy and growing tech employment from such heavyweights as Apple, Facebook and Oracle.
“This transaction highlights Madison Realty Capital’s solutions-oriented approach and unique ability to serve as a single-source financing provider to a highly reputable borrower,” Josh Zegen, managing principal and co-founder of MRC, said. “Austin is a rapidly growing, vibrant city experiencing exceptional economic growth, but faces high barriers to entry.”
The portfolio comprises the EastVillage, a 425-acre, master-planned residential community in the heart of Austin’s northeast tech corridor, and The Linden Residences, a 28-story condominium building in Downtown Austin.
The EastVillage property sits adjacent to Samsung’s semiconductor chip-making plant — one of Austin’s largest employers — which recently announced plans to expand with a $17 billion chip-making facility. It also sits in close proximity to other major employers, such as Dell and Amazon, as well as a number of burgeoning tech startups.
“The Parmer Lane tech corridor is home to some of the most prominent Austin employers and some of the nation’s most innovative companies, including Tesla, Apple, Samsung, Oracle, Dell, Facebook and 3M,” Zegen said. “However, the city is facing an undersupply of the high-quality housing options that employees in the Parmer Lane tech corridor demand.”
The mixed-use properties within the EastVillage master-planned site are being developed in two phases. The first will offer 312 luxury apartment units across six garden-style apartment buildings with resident amenities, including a fitness center, courtyard, dog-grooming station and swimming pool. The second phase will add 422 apartment units, 143,000 square feet of commercial space and additional amenities, including a game room and yoga studio.
A further 317 acres is already approved for the development of 1,264 multifamily units, 240 hotel keys and more than 1 million square feet of commercial space.
The Linden, at 313 West 17th Street in Downtown Austin, is a 28-story condominium tower. When construction wraps, the luxury property will include 117 residential units and 5,000 square feet of ground-floor retail and restaurant space. Condo units will fill the top 16 stories, with parking below. The amenity-rich units have been substantially sold to date.
“Madison Realty Capital’s senior financing for the EastVillage and The Linden marks an exciting milestone for both projects,” Reger said. “We are pleased to work with a single capital source that has the flexibility to finance these diverse projects.”
“We look forward to working with Reger, a best-in-class developer with a strong balance sheet, to complete future phases of development in Austin and continue to identify attractive opportunities for our investors and partners throughout Texas and the Southwest,” Zegen added.
Newmark’s David Douvadjian, Brian Butler and David Douvadjian Jr. served as advisors to MRC in the deal.