(Read more on the multifamily market.)
FORT WORTH-Fine Line Diversified Development is planning to build 3,000 apartment units within three years with three partners. The $200-million-plus pipeline is aimed at developing a class A portfolio for resale.
"We think in two to three years that apartment development is going to be a very attractive area to be in," says William V. Boecker, president and CEO of the Fort Worth-based Fine Line Diversified Development. He tells GlobeSt.com that development partnerships have been struck with Hudgins Apartment Development Inc. of Fort Worth, Insight Real Estate Strategies Inc. of North Richland Hills and JB Sparks & Co. of Dallas.
Fine Line's main equity source, Ed Bass, has invested in multifamily assets in Downtown Fort Worth, but didn't start moving capital into suburban projects until two years ago when the development division partnered with Hudgins on the 334-unit Stone Lake Garden Homes at 2651 Stonelake Dr. beside Riverside Golf Club at 3000 Riverside Dr. along Texas 360 in Grand Prairie. Bud Hudgins says the investment partnership acquired a 16-acre tract for a second phase when it bought 54 acres for Stone Lake, a 24-acre development on terraced land overlooking the lake and golf course. "We viewed them as excellent sites," he says.
With Stone Lake Apartments built and sold, Hudgins and Fine Line will break ground in January on the 350-unit Lakeside Villas, an 18-building project with three acres of frontage on the banks of the golf course's 75-acre lake. Comparable class A developments would cost roughly $30 million to build depending upon site, unit count and design.
Lakeside Villas, penciled for a late 2008 delivery, will be 60% one-bedroom units, 35% in two-bedroom floor plans and the balance as three-bedroom apartments, with direct access garages spread across 40% of the mix. Units will average 850 sf; monthly rents will be in the $1.10 per sf range.
BGO Architects Inc. of Dallas designed Lakeside as it did Stone Lake. The new project's general contractor will be Northwest Construction Co. Inc. of Garland.
Boecker says the equity partners will vary with the projects, but Bass will be the principal investor in the portfolio. Lakeside Villas' equity partners were Bass, his brother Lee Bass and Richard Templer of Boca Raton, FL and Chicago--the same trio who funded the Stone Lake development.
Also in January, Fine Line and Insight, led by Joe Petersen, will break ground on the 400-unit Watercolor Apartments along Beach Street in North Fort Worth. Meanwhile, Jay Sparks of JB Sparks & Co. is negotiating for infill sites in Dallas. Hudgins too is scouring Dallas for development sites and San Antonio too.
"We are open to wherever they take us," Boecker says, "but we think it will all be in Texas. We are doing it to create a portfolio to sell." He says the goal is to develop three class A projects annually for three consecutive years. Design-wise, the projects will range from low-density, garden-style to Texas doughnut designs with four- to six-story buildings wrapping around structured parking.
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