Wednesday, August 27, 2008
Three-Year Loan Clears for $200M MXD
DALLAS-With the hole now dug, Gables Residential has its construction capital in hand to advance work on its 21-story residential tower for the $200-million 1717 McKinney mixed use. The co-developer of the Uptown site has secured a three-year, floating rate loan from Wachovia and Compass banks.
Gables and Dallas-based Granite Properties have been prepping the 2.2-acre site at 1717 McKinney Ave since April. Gables' plan calls for 292 rental units on 20 floors atop 14,000 sf of retail while Granite's stake will be a 361,524-sf, 19-story office building. The towers, with LEED certification as part of the plan, will be linked by a six-level parking garage and shared amenity deck. The developers are eyeing delivery in April, possibly May, 2010.
David Reece, senior vice president of finance and capital markets for the Atlanta-based Gables, tells GlobeSt.com that Charlotte, NC-based Wachovia is the lead lender, with Birmingham, AL-headquartered Compass Bank in a participating role. "Most banks today don't want to keep more than $30 million on their books," he explains about the motivation for the split. Teams in Atlanta and Houston for Wachovia and Compass, respectively, arranged the financing.
Reece says the financing package, which is Libor-based and has "a couple" extension options, took "three or four months" to pull together. "It took a little bit longer because we had to participate it," he says, adding the shared amenity deck also complicated the deal-making process. Wachovia was seated first and then he brought Compass Bank to the table.
"Both Wachovia and Compass are familiar with the market and know the location," Reece says. "They recognize the location is a very good one." The two towers will sit at the kissing point of McKinney Avenue, Cedar Springs Road and North Akard Street.
Gables, like others, still had to battle the capital markets' turmoil to win financing despite its financial muscle. "Generally, it was more difficult given the constraints of the capital markets," Reece says. "We had other loans from both banks so it was a good fit. It wasn't much longer than normal."
Gables' tower will have 181 one-bedroom units, averaging 920 sf; 105 two-bedroom units, averaging 1,370 sf; and six three-bedroom units, averaging 2,500 sf. Because it's so early in the development, the projected rents have yet to be set. The amenity deck will boast a 4,000-sf fitness center and outdoor pool.