Zale Properties scores construction loan for Arlington multifamily
Dallas-based developer financing apartments, built-to-rent through Principal Asset Management
The high cost of debt has dried the well for many multifamily developers, but that’s not the case for Zale Properties and its latest project.
The Dallas-based developer secured a four-year, fixed-rate loan for its Arlington residential rental community, the Grove at La Frontera, through Principal Asset Management. The loan amount wasn’t disclosed.
JLL Capital Markets arranged the financing, and a team led by John Brownlee, Bo Beidleman and Chad Lisbeth negotiated the deal. The Grove at La Frontera will mix apartments, single-family rentals and retail. It will have 336 multifamily units and 60 bungalow-style units. The property is located at 8100 South Collins Street, about 25 minutes from downtown Fort Worth and downtown Dallas. It’s expected to be completed in 2025.
The Grove is one of many apartment complexes slated to come online in DFW over the next two years. Almost 34,000 units had been delivered in November year-to-date, a 29 percent increase from the previous year. The dramatic increase in supply has softened rent prices, a trend that is expected to continue this year as more units are delivered. Meanwhile, the cost of debt has made financing a challenge, causing new starts to drop.
Family-owned Zale’s portfolio includes 22 properties in Dallas-Fort Worth and one in Austin. The DFW properties are located throughout the Metroplex, in Arlington, Dallas, Garland, Lewisville, Plano, Rowlett and Richardson. The company’s other project under construction, the View at Sapphire Bay, caught fire in December, two months before its scheduled opening. The community, on the shoreline of Lake Ray Hubbard, is slated for 394 units across two buildings. The development was estimated to cost $87 million, in a 2021 filing with the Texas Department of Licensing and Regulation. Principal Global Investors provided an eight-year, fixed-rate construction loan of more than $58 million in May of 2022.