Strand Condos Developer Lands $82M Construction Loan

PORTLAND-Local developers Jack Onder and Homer Williams in mid-June secured an $81.85-million construction loan for their three-building 214-unit Strand Condominiums development in the Riverplace District. Chicago-based Corus Bank is the lender. The borrower is an Onder-Williams joint venture called Riverplace Partners LLC.Corus Bank loan origination officer David Ploger tells GlobeSt.com the adjustable-rate financing will be funded in phases after the JV exhausts its equity and mezzanine debt. Ploger estimates that the developers will be going vertical on the first tower before it needs to begin using its construction loan.The interest rate on the loan floats over 90-day LIBOR, says Ploger. He declined to specify the loan-to-cost percentage; however, Onder told GlobeSt.com previously that the project would cost $110 million, which would make the loan-to-cost about 65%. The remaining 35%, or $28 million, will come in the form of equity and mezzanine debt, says Ploger.Condominium loans in some other cities, such as Las Vegas, can be as high as 90% of cost, but those are usually contingent upon presales. The loan for the Strand is not contingent upon presales and is non-recourse. Ploger says the loan is Corus Bank’s first transaction with Onder and Williams and its third condominium construction loan in Portland.The project will consist of two 11-story buildings, one 13-story building and several townhouse units for a total saleable area of about 320,000 sf. Townhouse units will fill the first two floors of each of the condo towers, some of which will be set up as live-work units. The upper floors will house more traditional condominium units. The unit prices will be upward of $350 per sf. The project also includes parking, public and private, a 7,500-sf retail building. Ankrom Moisen is the architect for the project and Walsh Construction is the general contractor. The construction timeline is 24- to 36 months.The development is regulated by a disposition and development agreement between the developer group and the Portland Development Commission, the city’s urban renewal agency. As part of the agreement, the PDC sold the land to the developers last year for $3.7 million. The PDC acquired the site from Pacific Power & Light in 1985 and for the last several years has been working with the state Department of Environmental Equality on a clean-up plan for the site, which was home to the Lincoln Steamplant. As part of the remediation process, some 60,000 cubic yards of contaminated soil is now being be removed from the site, which will then be “capped” with a one-story underground parking garage upon which the condominium towers will stand.