We’ve invested $9 million in the construction of a mixed-use building on a 7.8 acre property in Cedar Park, just outside of Austin, Texas. Building plans include 333 apartments and 3,971 square feet of commercial space. This investment is part of our broader strategy of providing opportunistic financing for new construction in fast-growing areas around the country.
The borrower, North American Properties, is a national real estate developer with offices in Cincinnati, Dallas, Atlanta, and Fort Myers. Since inception in 1954, North American Properties has developed over 19,000 residential units and 22 million square feet of commercial space across 15 states.
Business plan
Construction on the property is already underway, with completion expected in the third quarter of 2020. Once the property is stabilized with rent-paying tenants, we expect that North American Properties will pay back our investment by selling the property or refinancing to lower-rate, long-term debt.
Why we invested
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Strong local economy: Cedar Park is a suburb of Austin, one of the ten fastest-growing cities in the US. Along with the rest of our investments in the Sunbelt, we expect the growing population will continue to support demand for new apartment projects like this one.
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Experienced sponsor: North American Properties has extensive experience in developing multifamily, mixed-use and retail spaces since their inception in 1954. They have successfully developed and currently own a similar community in Cedar Park.
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Attractive margin of safety: the borrower has $7 million of equity which is junior to our position. They would have to lose their entire investment before our principal was threatened.
