|
TRANSACTION OF THE WEEK!!!
$147 Million (Projected Sell Out) 409 Home "Active Adult" Single-Family Community in the Kingwood Sub-Market of North Houston: GSP has arranged the placement of joint venture equity and non-recourse financing for Los Angeles based Tenzer Company's Kingwood Lakes South active adult community. Michael L. Tenzer, Chairman and CEO of Tenzer Co., stated, "This is one of the most exciting residential opportunities in my 37 year homebuilding career because of barriers to entry, favorable demographics, a spectacular and non-duplicable location and an underserved market segment". Tenzer previously developed large-scale active adult communities nationwide, including Leisure Village in Camarillo, CA, and the famed Leisure Village Ocean Hills in Oceanside, CA. GSP was retained early in the pre-development process, providing a wide range of advisory and financial services. "Their guidance was critical to the successful evolution of the debt and equity structure," said Tenzer. The Kingwood Community: Kingwood is one of the nation's premier master planned communities, first established in 1973, a venture between Exxon and The King Ranch, just 22 miles north of the Houston Civic Center. Developed by Friendswood Development, a wholly owned subsidiary of Exxon, there are more than 30,000 homes and 60,000 residents already residing in Kingwood. Southern California comparables might include Mission Viejo, Westlake Village and Valencia/Newhall. Tenzer's Kingwood Lakes South Development: A singular site, "the proverbial hole in the donut", approximately 195 acres surrounded by the "back 9" of the forested Lake Course, one of four championship golf courses comprising the Kingwood Country Club, owned and managed by Club Corporation of America. Market research indicates that buyers will come from the greater Houston area, not just the Kingwood sub-market. Land Planner David Cobey, AIA and renowned architect Barry A. Berkus, AIA, have both worked with Tenzer for more than 30 years. Berkus and Tenzer have created a unique English Country theme with single family, detached patio type homes, 6 floor plans (1 and 2-story) ranging in size from 1,886 to 2,829 s.f. with an average sales price projected over the project life of $318,500 per unit, excluding upgrades and golf course lot premiums. The community will include a manned gate guarded entry, private streets and boulevards, common areas including an approximate 15,000 s.f. community building, swimming pool and tennis courts, R.V. and boat storage, and heavily landscaped walking commons directly linking each cul de sac to the Kingwood Country Club. Equity Placement: An approximate $12.7 million equity placement was arranged through a New York based financial advisor representing a high net worth family. Tenzer Communities, LLC is the developer and homebuilder. Tenzer Partners, LLC is the General Partner of Kingwood Partners, LP. Tenzer has contributed 10% of the total equity. The structure, with preferred cum returns, promote interests and look back features, is confidential and specific to this transaction. Financing: Three major financial institutions competitively bid for this 4½ year financing package, a $19 million land development facility, and a $15 million revolving construction loan. A commitment was issued in December from a Houston based bank providing A&D, infrastructure, common area, model center and phased construction financing on a non-recourse basis. Terms: (1) $19 Million A&D Loan: 48 months with 2 each - 6 month extensions, Prime + 1.25%, 2 pt. origination fee, 130% release provision, 4 phased lot development subject to performance requirements; (2) $16 Million Construction Revolver: Prime + ¾%, 36 months with annual renewals, ½ pt. line fee, lesser of 75% of appraisal or contract price or 100% of cost, $15,000,000 revolver, spec limitation is 12 units plus 7 models. The closing of the debt financing occurred earlier this week. (George A. Smith, Gary M. Tenzer)
|
