48 East condo tower secures construction loan
A 33-story condo tower planned for the Rainey Street Historic District has received an $87.9 million construction loan. Miami-based 3650 REIT — a national commercial real estate lending, investment and services firm — provided the loan to a joint venture between Pearlstone Partners and Newgard Development Group for the development of 48 East, according to an April 29 announcement.
“3650 REIT’s real estate expertise and ability to provide flexible financing solutions, combined with our strategic partnership with Newgard and specialization in Austin will enable us to bring to market a first-class project that will resonate with and meet the needs of the local market,” Robert Lee, CEO at Pearlstone Partners, said in a statement.
Lee told the Austin Business Journal a year ago that the partners on the project were finalizing financing on the tower, estimated to cost between $140 million to $150 million to build.
The project is fully permitted by the city. Lee couldn’t immediately be reached for comment so it’s unclear when construction may begin on the condo tower. 48 East will have 249 luxury units for sale, up from 215 proposed last year, according to the announcement. The tower will have 274 parking spaces across nine levels, and high-end amenities including a rooftop pool, viewing deck and fitness facility. Units will be as small as 456 square feet and average about 851 square feet to make the condos more affordable to young professionals, the developer said in the announcement. “This loan afforded us the opportunity to provide capital to a strong joint-venture sponsorship encompassing both local market knowledge and high-rise expertise to develop this transformative project in Central Austin,” 3650 REIT Managing Partner Jonathan Roth said in a statement. “The affordability of the units at 48 East in
tandem with its superior amenities and prime location near Rainey Street and Lady Bird Lake, as well diverse
dining and nightlife options, should help generate substantial demand for units at the property.”
Mike Guterman at Highland Realty Capital, a California-based commercial real estate finance firm, was responsible for arranging the financing along with John Ghiselli from Waterloo Real Estate Investments. 48 East is one of a handful of projects under construction or in the pipeline for Rainey Street area. Others include:
- Canada-based developer Intracorp Projects Ltd. is developing the 49-story 44 East condo tower that will bring 322 for-sale units and ground-level retail space to the corner of Cummings Street and East Avenue.
- Kevin Burns, founder of UrbanSpace, has plans to develop his own 51-story high-rise with 290 apartments and a 293-room hotel at 90-92 Rainey St. The project is just beginning the entitlement process with the city of Austin.
- Construction has started on The Quincy, Endeavor Real Estate Group LLC’s 30-story apartment tower at 91-93 Red River St. MetLife Investment Management, MetLife Inc.’s (NYSE: MET) institutional asset management business, recently signed on as an equity partner. The tower is expected to deliver in the third quarter of 2020. It will contain 72,997 square feet of office space, 10,545 square feet of retail space and 347 apartment units. It’s under construction now.
- Genesis Real Estate Group is developing a 50-story apartment tower called The Travis overlooking Lady Bird Lake in the spot of the old Villas on Town Lake property.
- The 164-unit condo tower 70 Rainey is nearing completion by Sackman Enterprises.
- WeWork Companies Inc. bought 4.7 acres at Red River and East Cesar Chavez streets for potential high-rises.