Austin, Texas—Local developer Legend Communities has selected Colliers International as the exclusive advisor to raise $217 million in debt and equity for a new two-tower development. The structured finance team of Jeffrey Donnelly and Ulrike Ahrens will lead the Colliers team.
The development, One Two East, will offer 474 units of multifamily and active senior living residences. The community will cater to Austin’s continued growth in apartment demand as the city has been one of the top two fastest growing cities in the United States in the past several years. According to the Austin Business Journal, Angelos Angelou, the principal executive officer of Austin-based economic development firm AngelouEconomics Inc., predicted Austin will add 70,000 residents in 2016 and another 60,000 in 2017.
One Two East will be located in the Downtown/East Austin submarket at the intersection of IH 35 and 12th Street. It’s also strategically located less than one mile away from the University of Texas Campus, which has 50,000 undergraduate and graduate students, and directly across the street from the 244-bed Brackenridge Hospital. The property’s location will be even better positioned in the next few years as two new projects are heading its ways: The $295 million, 211-bed Dell Seton Medical Center and the University of Texas at Austin Dell Medical School are both under construction nearby.
Legend Communities, led by principals Haythem Dawlett and John Scardino, is no stranger to multifamily, executing several large-scale residential developments throughout Texas over the last 20 years. For One Two East, the senior living building will have a rooftop garden and a full-time activities director, and the other building will have workout facilities. Each building will have a pool and parking, the Commercial Observer reported, based on an interview with Bill Hayes, COO of Legend Communities.
Donnelly of Colliers added that the developer has designed a “diverse product” that will offer 279 units of market-rate multifamily and 195 units of senior active living in two separate towers, with large retail at the base of the buildings.
He also added that projected rents for both types of residences will be comparable to other rent ranges for properties in Austin and that financing for the project should be finalized by the second quarter of 2016. According to the Commercial Observer, Colliers is looking to place roughly $180 million in debt and anywhere from $35 to $40 million in preferred equity or mezzanine debt.
“While we expect to have agency construction loan options for this project, we are certain that the offering will also be enthusiastically embraced by bank balance sheet lenders and insurance company lenders,” he said. “I think the debt falls into place fairly quickly—although due to size of the construction loan, it may entail a syndication of bank lenders. We’re equally confident that the equity investment opportunity will be very attractive to large institutional investors eager to deploy capital in fast-growing Austin.”
Rendering courtesy of RHODE PARTNERS