Avatar Financial Group LLC, a Seattle-based national hard money bridge lender for commercial real estate, has provided $6.5 million in financing for the 154-unit Bellfort Plaza Apartments. The multifamily community is situated in the Golfcrest area of Southeast Houston.
The interest-only loan carries a 24-month term and represents 60.27% of the collateral’s stabilized value of $10.8 million. The borrowers, HSR Bellfort Plaza Apartments, LLC, are local real estate investors that acquired the property for $4 million in 2003. The funds will help to pay off a $6-millon first mortgage and complete construction of 14 new units at the asset. The sponsor intends to exit the Avatar loan via long-term financing once interest rates become more favorable.
“We’re happy to be able to help the owners of Bellfort Plaza maintain and continue their operations until interest rates start to trend back down—a strategy that many commercial property owners we work with are taking in these challenging times,” said Avatar’s President & Co-Founder, T.R. Hazelrigg IV.
“Despite a record amount of new multifamily construction, Greater Houston is one of the few markets that experienced positive rent growth last year,” Hazelrigg commented. “Forecasts also indicate that fundamentals in the metro will continue to be favorable for apartments. That’s especially true for Harris County, where renters account for a large component of the population.”
According to the US Census Bureau, Metro Houston ranked second in the U.S. for population growth last year, bringing the headcount to more than 7.5 million. Harris County, already the nation’s third-most populous county, led its counterparts in population growth to end the year at 4.8 million residents.
Most of those gains are due to international migration, which continues to be a major driver for the region’s overall growth. Harris County attracted four out of every five immigrants to Houston, with that cohort increasing by about a quarter-million in the past eight years. Harris County also reported 65,450 natural births last year, ranking second only to Los Angeles County.
The high cost of homeownership will also serve to keep the submarket’s renter profile steady. The Houston Association of Realtors found that Harris County is the least affordable housing market in the metro, with just 29% of the households qualifying for a mortgage.
