MSD Partners LP and Little Rock, Arkansas-based Bank OZK are providing $194 million in construction financing for the 44 East condominium tower being built in Austin’s Rainey Street district, the project’s developer said in a May 27 announcement.
The 49-story tower developed by Vancouver-based Intracorp is expected to be complete in 2022. More than 45% of the tower’s 309 condos have been sold.
MSD Partners is an investment advisory firm tied to MSD Capital LP, the private investment firm for Michael Dell and his family.
“Austin’s resilience, like its dynamism, makes the city so enticing, and it’s one of the many reasons Intracorp chose to develop here,” Intracorp North America President and CEO Don Forsgren said in a statement. “It’s also why capital investment in this city continues to make sense even today. We are excited to complete this new financing from MSD and Bank OZK allowing Intracorp to take an important step forward in delivering an extraordinary new residential tower to downtown Austin.”
Prior to the pandemic, Intracorp had been scheduled to close on the construction loan at the end of March or early April, Intracorp Senior Vice President/Managing Director Brad Stein told the Austin Business Journal. MSD brought Bank OZK (Nasdaq: OZK) into the deal in April.
Neither the pandemic nor the slight delay in obtaining the loan slowed construction or sales, he said.
Of the buyers with firm contracts, none backed out, Stein said. “That was the key for this lender group,” he said.
Stein said Intracorp made the decision in November — when its started unit sales — that the company was going to pay to start construction out of its equity. Construction started in October.
Intracorp, Vancouver-based Northland Properties Corp. and other limited partners are providing equity in the project, according to the developer.
Page Southerland Page Inc. is the lead architect for the tower’s exterior and interior design for the residences. Michael Hsu Office of Architecture handled the interior design for the common areas and amenity spaces. Flintco LLC is the general contractor and Urbanspace is handling project sales and marketing.
Units at 44 East include one- to four-bedroom homes ranging from just under 500 square feet to more than 3,500 square feet. According to Intracorp, condos remaining on the market range from under $400,000 to over $4 million.
Adam Piekarski, co-head of real estate credit at MSD Partners, said: “We believe the Austin market will again demonstrate its resilience, as the city and region continue to benefit from the relocation of large numbers of people and companies.”
Victor Reynoso, executive vice president of originations for Bank OZK’s Real Estate Specialties Group, said: “This project embodies the high standards Bank OZK consistently seeks in its project financings — marquee real estate, strong market fundamentals and top-tier sponsorship.”