Austin Project Backed by 3650 REIT
The high-yield lending arm of 3650 REIT has originated an $87.9 million loan for a residential-condominium project in downtown Austin.
The 249-unit property, at 48 East Avenue in the Rainey Street Historic District, has a projected cost of $120 million. The developer of the 30-story building is a joint venture between Pearlstone Partners of Austin and Newgard Development of Miami.
The fixed-rate loan, which closed late last month, has a three-year term and a one-year extension option. It was arranged by Highland Realty Capital of El Segundo, Calif., and Waterloo Real Estate of Manhattan Beach, Calif.
Robert Lee, founding principal of Pearlstone, acquired the parcel at 48 East Avenue in 2015. At the time, it housed small apartment buildings and Class-B office properties.
The planned tower was a departure for Pearlstone, which had previously focused on low-rise properties. Newgard, an established builder of Florida high-rises, joined as a partner while Pearlstone was in discussions with 3650 REIT for financing. Jonathan Roth, a managing partner of the Miami REIT, and Highland helped arrange Newgard’s participation.
The project is near Ladybird Lake and a 10-mile scenic hiking trail. The Rainey Street Historic District, in the southeast corner of downtown Austin, has seen extensive redevelopment over the past 10 years.