Friday, August 05, 2005

Downtown & Uptown Real Estate News

GlobeSt.com EXCLUSIVE: SoCo Developer Clears Final Hurdle

DALLAS (GlobeSt.com) - Within a week, the developer of SoCo Urban Loft Condominiums will be sitting at a title company table to begin a whirlwind closing on 70 reservation contracts for a 203-unit project--a feat made possible by a financing restructuring that replaced a rental-required HUD mortgage with a conventional conversion package for $18.45 million.

"All the restrictions and impediments are going away," says Stephen Kanoff, executive vice president for Dallas-based Westmount Realty Capital LLC. The SoCo Urban Lofts at 1122 Jackson St. got its seed money from a HUD first-lien mortgage and city-backed second-lien package earmarked to provide rental units in the downtown. He says it was always "hoped" that the converted warehouse could be transitioned into "for sale" units, but it's taken eight years for the condo market to mature and mortgage restrictions to burn off.

Kanoff tells GlobeSt.com that the HUD loan's lockout period ended late last year as did a five-year hold for federal historic tax credits. The next hurdle was to find a lender willing to back a Downtown Dallas project, he says. James Richards with Live Oak Capital Ltd. in Houston arranged condo financing with a floating interest rate that required 30% presales through Capital Source Inc. in Chevy Chase, MD. Six months ago, the rental name--Santa Fe Pacific Terminal Lofts--was dropped and replaced with SoCo to reflect the identity change and reference the south of Commerce Street location.

"With the new mortgage closed that will allow the actual closings to begin," Kanoff says. He says all net gain initially will go to the lender and the city until the break-even point is reached.

"After the first 70, the mortgage gets paid down dramatically," he says. "There a good margin between the total debt and total sellout."

Kanoff says reservations were getting signed at 10 per month, but picked up in recent months to 15. If the momentum holds, he predicts the adaptive reuse project can easily be sold out by late 2006. Units range from 831 sf to 1,400 sf; prices go from $150,000 to $300,000 plus. The 12-story converted warehouse, positioned within two blocks of the first in-town grocery, has Italian-style kitchens in a true loft design and amenities like a rooftop pool and yoga studio.
Kanoff says he and partner Cliff Booth are eyeing their in-town stock for other likely conversion candidates with downtown and Uptown condos in such high demand. "We're in the early planning stages on another project," he admits, careful not to pinpoint any one building at this stage of the game.

Image inset: 1122 Jackson St.