Houston Area Office, Retail Property Financed for $113M

July 20, 2007
By Barbra Murray, Contributing Editor

A construction financing package valued at $113 million has been put in place for Market Street at Woodlands, a 500,000-square-foot mixed-use property in The Woodlands, Texas, about 30 miles outside of Houston. The borrower, a joint venture involving Kimco Realty Corp. and Trademark Properties, secured the fixed-rate, permanent loan from Capmark Finance Inc.

The financing comes in the form of an 80 percent LTV loan with a 10-year term and interest-only payments for the initial three years. Kimco and Trademark developed the 34-acre property in 2004. The financing was used to repay the original construction loan for the project's development. "The loan is substantially in excess of the development cost, so there's a return in capital to the development parties," David Fishler in Capmark Finance's New York City office, told CPN. Market Street was constructed for approximately $90 million. Located within The Woodlands Town Center, the property features approximately 400,000 square feet of retail space and is home to a bevy of leading retailers such as Borders Books and HEB Grocery, which serve as anchors, as well as Tommy Bahama Tropical Cafe & Emporium, Sharper Image, Cinemark Movie Theatre and Eddie Bauer. The office segment consists of about 100,000 square feet occupied by a list of tenants that includes Merrill Lynch, The Gallup Organization and Edward Jones. Additionally, a 50-room boutique hotel with 25,000 square feet of additional ground-level retail space is being planned for a spring 2009 opening. Market Street's current occupancy level is 95 percent. "It's a very high quality property," Fishler added. "It's very unique and well thought out, and it has been well received in the community. The combination was able to allow the borrowers to get aggressive financing."

Kimco is a New Hyde Park, N.Y.-headquartered retail REIT credited with owning and operating the largest portfolio of neighborhood and community shopping centers in the country. As of April 23 of this year, the company owned interests in approximately 1,365 properties comprising 175 million square feet of leaseable space in 45 states, Puerto Rico, Canada, Mexico and Chile. Based in Fort Worth, Tex., Trademark is a developer of premier outdoor retail and mixed-use projects, and has completed in excess of 4.5 million square feet in development and redevelopment in the 15 years since its inception.

Houston commercial loans