$17.8M Multifamily Project Lands $4.3M Equity

The City of Pasadena is a southeastern suburb of Houston that's known in development circles for a high barrier to entry. That and a longstanding relationship with Embry Partners were the key factors behind Tuckerman's funding in the 248-unit Broadwater, the first new multifamily project in four years in the city.

Embrey Partners Ltd. broke ground at the end of 2002 with a construction loan funded by Bank of America. The garden-style complex situated on 16.9 acres will deliver in the fall.In a press release, Charles Lauckhardt, the Tuckerman Group's chairman and CEO, said the interest in investing in Pasadena is "due to the strict building requirements for multifamily development." Plus, he added, Tuckerman has had "great success" in its prior dealings with Embrey Partners.

Glen Weisberg, Tuckerman's managing director, tells GlobeSt.com that Pasadena's barrier to entry has created a ripe environment for new product. He says rent will range from the mid- to high 90 cents per sf.

The Tuckerman Group is the real estate investment unit of Boston-based State Street Global Alliance LLC. The Broadwater investment represents the fifth transaction for an $85-million multifamily development fund focused on "from the ground up" projects and their eventual sale. Weisberg says Tuckerman's Multi-Family Development Program III will be funding 10 to 12 properties. The program, fueled by institutional investors such as State Street and high net-worth individuals, will leverage up to 80% of the investments, which could result in up to $350 million in real estate acquisitions, he says.

The first Tuckerman multifamily fund, completed in March 2000, financed five luxury complexes valued at $108 million. That fund provided equity in Embrey's 334-unit Crescent Apartments in Lenexa, KS. It was sold in 1999. The second funding vehicle closed in May 2000 with investments in eight apartment communities and total capitalization exceeding $200 million. Weisberg says it fueled development of Embrey's 378-unit San Simeon Apartments in Irving, TX, where construction has just wrapped up and lease-up is now under way.