DALLAS-With one apartment project under development in suburban Tulsa, OK, Encore Multi-Family LLC has broken ground on two more apartment communities in tertiary markets in Texas. The local firm, which recently completed apartment communities in Burleson, TX, and Corpus Christi, TX, has plans to expand into Colorado later this year.
The two new multifamily projects are Encore on Marlandwood, a 180-unit community in Temple, TX, and Encore on Gibson Lane, a 168-unit community in Texarkana, TX. Together, both projects have a development cost of more than $33 million.
Both projects were financed through the US Department of Housing and Urban Development (HUD) 221(d)(4) program. HUD-approved lender Berkadia arranged the loan.
“We have capitalized on the HUD 221(d)(4) program,” says Jay Graham, vice president of development for Encore Multi-Family. “The program has allowed us to roll out a class A, market- rate product during this economic downturn. Since 2009, we’ve done 1,400 units, and as the uptick is coming, we are filling our pipeline.”
Graham tells GlobeSt.com that Encore Multi-Family is focused on developing apartment projects in markets that are underserved, particularly when it comes to newer, class A product. All three projects the firm has under construction are situated in markets that tend to be overlooked by national developers and apartment REITs.
Graham contends that many secondary and tertiary markets provide better investment opportunities because their local economies are strong and competition from other projects is limited. “People have pretty much ignored these markets,” he says.
Temple, for example, is situated along Interstate 35 between Austin and Waco. It houses one of the largest military presences in the world, along with a significant regional medical center.
“Our project in Temple will be the newest product east of I-35 in 10 or 12 years,” Graham says. “We’re going to be offering a market-rate product that has not been seen in Temple.”
Likewise, Texarkana is situated along a major interstate, I-30, and is the largest city between Dallas and Little Rock. It is fast becoming a significant transportation hub for northeast Texas and is home to the Red River Army Depot. Moreover, Texas A&M University – Texarkana is expanding rapidly.
“Our property will draw government employees, along with those employed by the new transportation companies and college students,” Graham notes. “The newest product to come online in the northwest quadrant where our project is located was completed in 2002. Since then, it has constantly been filled at 98% or better. We are bringing market-rate product that is desirable and needed in the market.”
The Temple and Texarkana developments will open in early 2012. In addition to the three projects it has under development, Encore Multi-Family has approximately 1,000 units in its development pipeline.
Along with multifamily, the Encore family of companies is involved with retail, hotel and office, according to Brad Miller, president of Encore Multi-Family. “Multifamily is high profile within the company because of all our development activity,” he notes.
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