$7.2M Loan Backs Knox Street Retail Project

Knox Street Promenade, a sister project to the 74,000-sf Knox Park Village, gets underway next week as crews start to raze a 12,000-sf AAA office building and a 3,500-sf Army Navy structure, Brad Donnell, senior director for Metropolitan Capital Advisors Ltd. in Dallas, tells GlobeSt.com. Donnell arranged the 24-month construction financing with SouthTrust Bank in Dallas, the lender for most of the developer's projects. Shafer Property Co., borrowing under the moniker of Knox Street Promenade LP, secured an interest rate at 30-day LIBOR plus 2.25 basis points for the construction phase.

Donnell says the financing reworked a $4.8-million package signed in December 2002 because the developer was able to purchase additional tracts that altered and expanded the project. Shafer now owns 2.5 acres with frontage along Central Expressway's service road, Armstrong Boulevard and McKinney Avenue. "It is difficult to assemble enough land to do much down there," Donnell says of a premium buy in August that allowed the project to be reconfigured. The infill area is fetching $60 per sf to $75 per sf, give or take, with the premium tab going to tracts with freeway frontage.

Donnell says ground will break at the 75% pre-leased mark, making 100% easily within reach by the summer 2004 delivery. Committed tenants are Potbelly Sandwich Works, Comet Cleaners and a restaurant, Sage. The Kansas City, MO-headquartered Walton Construction Co.'s Dallas team is the general contractor of Knox Street Promenade, a mix of five single-story buildings designed by locally based Callaway Architects.

Shafer's nearby Knox Park Village, a mixed-use project, also stands at 75% leased. Its tenants are Baja Fresh, AAA, Pei Wei Asian Diner, Luxury of Leather and Centennial Fine Wines.