Dubbed 1201 Canal Apartments and Condominiums, the project is slated for a 2008 completion. According to Thom Cooley, vice president with the Atlanta office of ARCS, the project is Khouri Development's first rental one.
"They've concentrated on condos in the past," says Cooley, whose company worked out an $18.55-million forward permanent financing. He explains that Khouri originally had planned a straight condo project for the Krauss department store, built in 1903. But two days after plans were approved to launch conversion, Hurricane Katrina came ashore.
"The surge in construction costs meant it didn't make economic sense to develop all condos," Cooley tells GlobeSt.com. "But they could get historic tax credits on equity for rentals." He goes on to say that some of the already committed condo buyers decided to stay with the project, which is why part of it is devoted to sales.
Bank of America is financing construction. ARCS is providing permanent financing for the apartments in a 10-year loan with 30-year amortization. The fixed rate is locked at 6.4%.
Cooley explains that working with Khouri Development on the project could yield great benefits. "We know New Orleans will come back," he adds. "If we back a good product close to the center of the city early in the process, even a little recovery means we'll be in good shape."
The rental units in 1201 Canal Apartments and Condominiums will be one and two bedrooms ranging from 550 sf to 1,050 sf. The projected rents for the one-bedroom apartments are $1,275 per month and two-bedroom units, $1,750. The condos range from 1,229 sf to 3,000 sf. The asking prices are being kept confidential.
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