Bill Luedemann, senior vice president and senior director for Minneapolis-based NorthMarq Capital Inc. in Houston, tells GlobeSt.com that WhiteCo Residential abandoned the Dominion Post Oak condo plan because the market for luxury apartments is better than high-end condos. WhiteCo's tower is rising on a 0.85-acre parcel at 2323 McCue Rd., about a block north of the Galleria.
The apartments, positioned on top of a six-level parking garage, will range from 653 sf to 2,412 sf and rent for $1.63 per sf, according to Luedemann. The condo project was designed for units of 950 sf to 2,300 sf and penthouses of 2,300 sf to 3,700 sf. They would have cost $700,000 to $1.3 million.
Dominion Post Oak was announced two years ago when the condo market was hot. But, changes wrought by the economy certainly played a part in the rethinking. The project is just now getting off the ground, Luedemann says, because it took some time to change the development plus rework the details to the deal.
Luedemann arranged a $33.6-million loan with a fixed "market rate" that rolls from construction financing into permanent. GMAC Commercial Mortgage of Philadelphia provided the construction capital. The New York City-headquartered TIAA-CREFF will deliver the permanent financing when the project is completed in mid-2004.
Luedemann says the 10-year loan, with a 30-year amortization, represents a 75% loan-to-value ratio. He says the project was attractive from a financing standpoint because of its design, location and "strong, experienced sponsorship.
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