Houston Chronicle Sunday

DEAL OF THE WEEK

An apartment oversupply? No, not in Pearland

- By Katherine Feser katherine.feser@chron.com twitter.com/kfeser

Central Houston may have too many new apartments for current needs, but the opposite is true in Pearland, where constructi­on workers are preparing a previously undevelope­d 30 acres at the northeast corner of Cullen Boulevard and McHard Road/Brookside Road as the site of a $52 million project that will bring 247 units to the market in spring 2018.

The land is just south of Christia V. Adair and Tom Bass parks, near Beltway 8.

“There’s been limited new multifamil­y developmen­t in the city of Pearland, even during the go-go days,” said Matthew Morgan, president of Funding Inc., a Houston-based multifamil­y lender and mortgage banker.

Morgan and Kevin Kirton originated and underwrote a $41.9 million, constructi­on and permanent mortgage for the Lake Park Townhome Apartments on behalf of the borrower, Lake Park Pearland. The loan was made in accordance with the Federal Housing Administra­tion’s 221(d) (4) Multifamil­y Accelerate­d Processing program.

The project will consist of 23 townhome-style buildings with nearly 380,000 square feet of living space, according to the city of Pearland. It also includes a 4,274-square-foot clubhouse.

The three-story residentia­l buildings will be surrounded by green space. Rents are projected to range from about $1,150 for the smallest one-bedroom unit to just more than $2,000 for the largest three-bedroom unit, according to Morgan.

The most comparable properties in Pearland are in the Shadowcree­k Ranch area. Among six communitie­s totaling 1,963 units there, occupancy averages 93.4 percent, according to Apartment Data Services. That’s up from 76.5 percent a year ago. Rents at the six communitie­s average $1,297 a month for 972 square feet.

Pearland’s population of 115,600 is projected to reach 200,000 by 2025, according to the city.

The apartments, designed by architectu­re firm Gonzalez Newell Bender, will be finished in 2018, the same year some experts anticipate the Houston apartment market will stabilize and money will begin to flow again for new projects.

The loan for the Lake Park Townhome Apartments was funded through the sale of Ginnie Mae mortgage-backed securities through Berkadia Commercial Mortgage, according to Funding Inc. The permanent mortgage loan has a 40-year term at a fixed rate of 3.4 percent.

Since 1987, Funding Inc. has closed $1 billion in multifamil­y loans in Texas, New Mexico and California. The company is affiliated with Buckhead Investment Partners.

 ?? Katherine Feser / Houston Chronicle ?? The Lake Park Townhome Apartments will be built on 30 acres at the northeast corner of Cullen Boulevard (FM 865) and McHard Road/Brookside Road in Pearland. There will be 247 units.
Katherine Feser / Houston Chronicle The Lake Park Townhome Apartments will be built on 30 acres at the northeast corner of Cullen Boulevard (FM 865) and McHard Road/Brookside Road in Pearland. There will be 247 units.
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