HOUSTON-The 544,000-sf Houston Pavilions is good to go from a financial standpoint. Its development joint venture has received a $120.59-million construction loan and $47 million in equity so work can begin work on a retail, office and entertainment project for the CBD.
Development partners Geoff Jones and William Denton, joint venturing as Houston Pavilions LP, have broken ground on a three-block site bordered by Dallas, Polk, Carolina and Main streets--almost a year behind schedule. The CBD project is slated to deliver in late 2008.
Newport Beach, CA-based Buchanan Street Partners has provided the equity from its California Urban and Real Estate Fund, which is an investment with CalPERS. "With that fund, we can invest in national projects," says Kristin Olson, a Buchanan senior vice president, "and we focus on urban developments. We like to, where possible, provide equity dollars to urban renewal types of projects like this."
Olson tells GlobeSt.com that Buchanan was on board with Houston Pavilions because of the need for retail in the Downtown along with the project's potential for growth. "There's housing being developed and offices there, but no retail there at this time to make it a 24-hour Downtown," she adds. With the city being attractive from a convention standpoint, she anticipates that Houston Pavilions will be a visitors' draw too. The JV's Denton is president and CEO of Los Angeles-based Entertainment Development Group Inc., which develops urban retail and entertainment projects throughout the US.
Houston Pavilions will consist of 350,000 sf of retail, 194,000 sf of office and a 1,525-space parking garage. House of Blues, Lucky Strike Lanes, Books-a-Million and Forever 21 are the project anchors. Other tenants are McCormick & Schmick's, Red Cat Jazz Café and Antica Osteria.
Mark Sixour, a managing director for Holliday Fenoglio Fowler LP in Houston, arranged the construction loan through North Houston Bank. "The development of Houston Pavilions will continue the revitalization of Downtown Houston that has taken place over the past several years," he says in a press release. "It will provide a critical mass of retail that will fuel future Downtown residential growth and the 194,000-square-foot office tower is being developed at an ideal time as the Houston office market is considered to be as strong as it has ever been."
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