HOUSTON-A local self-storage developer has secured $2.67 million in a refinance of a three-year-old, 628-unit facility in South Houston.
BullsEye Partners IV LP will use part of the funds to pay off the original construction loan for the 64,792-sf BullsEye Storage-Gulfgate and apply the balance toward the build-out of the three-acre tract at 7300 S. Loop Freeway East, says B. Jeffrey Knowles, managing director in Houston for Holliday Fenoglio Fowler LP, who arranged the loan through GE Capital Real Estate's Dallas office. "We've financed all of their properties," he says, adding it's the fifth one that HFF has arranged for Houston developer Peter Morris.
Knowles tells GlobeSt.com that the loan was difficult to place despite the developer's track record. "Typically, a lender wants to see six to 12 months for a stabilized property," Knowles says, "and we didn't have that. He only had two months' stabilization."
GE Capital was willing to take the risk "because of the quality of asset and the track record of the operator," Knowles says. "He's one of the best operators in the market."The 10-year loan has a sub-6% fixed-rate interest, two years of interest-only payments and 30-year amortization. Knowles, hushed about the loan-to-value ratio for the deal, did acknowledge it can range from 70% to 75% in similar scenarios.
Knowles says the developer is seeking more sites to develop. "He's focused on sites inside Loop 610," he adds. "If he finds a site that supports the demographics they cater to, then he'll build." And those demographics, he explains, are made up of older, densely populated residential areas.
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