Commercial real estate investment bank Eyzenberg & Company has arranged senior debt financing for the development of two sites to meet demand for last-mile distribution and single-family housing in Texas.
Acting on behalf of Austin, Texas-based Rastegar Property Company LLC, Eyzenberg director Ronald Granite, with analyst Elena Burgos, arranged a new $4.6 million senior fixed-rate loan from a regional insurance company.
The financing will partially fund pre-development costs for two land parcels located at 11708 McAngus Road in Austin, and 700 Bunton Lane in nearby Kyle, Texas.
“The sites are located within one of the fastest-growing economic and residential areas of Texas where national tech giants have been devouring real estate at a rapid clip,” said Granite. “We were able to achieve higher than average leverage for this asset type as lenders’ interest in the Austin market remains very strong. Favorable financing terms are accessible with the right location, a strong sponsor and appropriate strategy.”
The funding comes on the heels of an announcement by Tesla CEO Elon Musk that the company will build its new $1 billion gigafactory on 2,000 acres some 15 minutes from downtown Austin. Corporations including Google, Apple, Oracle, Dell, Amazon and Facebook have announced major expansions in Austin.
Rastegar is set to begin pre-development of an approximately 700,000-square-foot industrial bulk distribution building (rendering top) on the 50 acres it owns in the Del Valle corridor that will cater to demand from big tech relocations. This area between Austin and San Antonio is underdeveloped now and it is ranked among the most rapidly expanding regional economies in the nation.
The 11708 McAngus Road parcel is within a Preferred Development site and Opportunity Zone just south of Austin Bergstrom International Airport where online delivery companies, including Amazon, operate gateway air facilities, and is five minutes from the new Tesla factory.
At 700 Bunton Lane, Kyle, Rastegar will build a residential development comprising detached single-family homes and townhome rental properties on a 200-acre site in an area where Amazon alone employs nearly 8,000 people.
David Eyzenberg, president of Eyzenberg & Company, stated, “Though most insurance companies do not finance non-income producing properties, especially land, we were able to identify a regional firm with an appetite to finance a low basis land banking strategy.”