Landmark Property's Redevelopment Plan Captures $230M in Financing

"We cut a lot of new ground with this," Jack Killough, managing director in Dallas for Holliday Fenoglio Fowler LP, emphasizes. He tells GlobeSt.com that the 264-acre multifamily assembly is securing a $170-million loan with a 11-year term and fixed-rate interest plus a $60-million, floating-rate revolving line of credit priced on the Freddie Mac Reference Bill.

The Village is owned by the Mack Pogue family, various Crow family interests and an institutional investor advised by Dallas-based Invesco Realty Advisors Inc. One complex was kept out of the financing because it's not part of the same ownership line, says Killough, who teamed with HFF executive managing director Jody Thornton to mastermind the financing. The borrower of record is PC Village Apartments Dallas LP.

The multifamily fortress is managed by Dallas-based Lincoln Property Co., which has been building out the land since 1965. When the Freddie Mac financing closed, Lincoln was underway with a 207-unit expansion of the Hill. The project's construction financing was rolled into the revolver, Killough adds.

The revolving line of credit is standing ready for Lincoln to tap so it can raze vintage product and replace it with class A. Killough says the flexible vehicle is set up so Lincoln can convert floating-rate debt from the revolver into fixed-rate financing at any time to run co-terminus with the initial $170-million loan's maturity. Part of the Freddie Mac money retired debt from another lender.

Killough says the logical lenders were Freddie Mac or Fannie Mae although the package was presented to some life insurance companies. "Ultimately, we found Freddie Mac was the most flexible and most creative in structuring the transaction," he says. "It will allow, as the market dictates and the value of the property increases, to continually redevelop units over the next 10 years. This is a dynamic facility that can adjust and grow and be flexible based on market conditions." Building in that flexibility, he adds, was the biggest challenge to a transaction that's been nearly a year in the making and ultimately closing at a Republic Title Co. table.

"Freddie Mac understood what the borrower needed. They listened to what the borrower had planned," Killough stresses. "They were also a lender that could have that much concentration of debt and not have to sell off pieces."

Killough can't discuss the extent of Lincoln's redevelopment plan, except to say it's "dynamic." He didn't rule out some retail rising in place of aging multifamily product in the cache of apartment complexes, now home to 10,000 residents. The acreage's location makes it a likely candidate for some type of retail. The land assembly is bordered by Greenville Avenue on the west, Northwest Highway on the north, Skillman Avenue on the east and Lovers Lane on the south.

The market-rate complexes carry monthly rents ranging from $420 to $1,935 for unit designs from 420 sf to 1,286 sf. The overall development, 337 acres, boasts a country club with restaurant and bar, fitness center, 12-court tennis center and pro shop, six-station driving range, nine acres of athletic fields, two lakes, 21-acre greenbelt with jogging trails and a five-mile commute from Downtown Dallas.