(Read more on the multifamily market.)

BOLIVAR PENINSULA, TX-Dallas-based investment partners Provident Realty Advisors and PNL Cos. have started entitlement work on one of the largest undeveloped tracts on the Texas coast. The partners control 2,700 acres with three miles of Gulf of Mexico beach frontage and one mile of intracoastal canal.

Jay Hawes, partner for Provident Realty, predicts the entitlement process will take two years to complete. He tells GlobeSt.com that infrastructure work on the Galveston County land, of which roughly 600 acres are developable, most likely won’t get under way until 2010. The balance of the land will remain wetlands for the 20-mile island.

Bolivar Peninsula, connected by a state-run ferry to Galveston, is predominately single-family properties and wide open space controlled by the Houston Audubon Society, intermingled with scattered neighborhood retail. “There are no condos, hotels or resorts right now,” Hawes says. “We will get the entitlements in place and determine what the market wants.”

The development partners’ affiliate, GM-I Ltd., bought the former Cade Ranch in late August in an off-market transaction with Crown Team Texas, a local partnership that had acquired it several years ago from heirs of the C.T. Cade family. The ranch is situated northwest of Texas 24 and 87 near High Island.

“With just over 6% of Texas coastal property remaining for development, we saw the Cade Ranch as a very compelling story,” says Leon Backes, founder of Provident Realty Advisors and general partner of GM-I Ltd. “As the pricing on the East and West coasts continue to escalate, the demand for the Texas coast will too and we see the Bolivar Peninsula as a direct beneficiary.”

Hawes says the partners acquired the land on a per-acre basis, cash on the barrelhead. Prices on the barrier island are widespread. Real estate agencies are hawking home sites from $70,000 to upward of $300,000.

“It varies in value. We feel like we made a good buy,” Hawes says. “The island has not been developed in a dense manner historically. We don’t see our development changing that.” But, the build-out plan is sure to include the missing links of condos, hotels and resorts in some fashion, with the developer promising to take full advantage of the ocean exposure and nearby wetlands. “And, we will probably have enough retail to serve the demand that we create,” he adds.

Provident historically has developed mixed-use projects and master-planned single-family communities, but it’s making inroads into the second-home market to place a bet on Baby Boomers from inside and outside the state. It recently acquired 130 acres on Lake Texoma, the state’s largest man-made lake situated 70 miles north of Dallas. “We will continue to evaluate opportunities. As with all our endeavors, if the fundamentals are in place, we’ll be active participants,” Backes says.

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