Energy Industry Sees Slow Recovery, Equaling Capital Activity

Villas at Foxbrick is approximately 21 miles north of Houston’s central business district.

HUMBLE, TX—More than five years after the end of the recession, the national economy is on a trajectory of slow, but sustained, economic expansion. The energy industry will enter a slow recovery period as crude oil prices bottomed out at the beginning of the year and have gradually risen from the floor position. With national unemployment at 5%, there is little slack left in the labor market, which should begin to drive stronger wage growth, according to Delta Associates . Looking forward, Delta expects a modest increase in GDP during 2016 driven largely by consumer spending and hiring. That sustained expansion leads to employment and housing growth, such as the refinancing of second-tier market multifamily assets. This type of product is found in the garden-style multifamily complex at 7150 Foxbrick Ln., Villas at Foxbrick . Hunt Mortgage Group recently provided an $11.6 million Fannie Mae loan to refinance the property consisting of 11 two- and three-story residential buildings. “Villas at Foxbrick, located in Humble, is in the north central area of greater Houston, approximately 21 miles north of Houston’s central business district,” notes Daniel Eibler , director at Hunt Mortgage Group. The borrower is TJD Texas Enterprises LLC , a Texas limited liability company. The loan terms include a 10-year term, 30-year amortization period and a 9.5-year yield maintenance period. The mortgage banker on this deal was Robert Merkt of Commercial Capital Advisors . “The borrower is a new Hunt Mortgage Group and Fannie Mae customer that has owned and managed Villas at Foxbrick since it was built in 2004,” noted Eibler. “The property is in very good condition and benefits from solid and thoughtful operations. It has been at full occupancy–99% or better–for the past 24 months.” The property is situated on 8.6 acres of land and was developed in two phases. Phase one was built in 2004 and consists of 120 units in seven buildings while phase two comprises 80 units in four buildings and was built in 2006. Villas at Foxbrick houses 200 units and the unit mix is one- and two-bedroom units in a variety of floor plans. Property amenities include 325 parking spaces, two saltwater pools, and a spa and fitness center. Eibler tells GlobeSt.com: “Hunt Mortgage Group refinanced Villas at Foxbrick out of a maturing CMBS loan. Hunt was able to provide a new long term, Fannie Mae DUS loan and return significant capital to the borrower. The borrower built the property, self-manages and maintains a high occupancy rate.”