The Geyser Group scored a $28.5 million construction loan for single-family homes and townhouses next to Springdale Park in East Austin.
The 60-unit project at 4908 Lott Avenue will rise on 5 acres at a time when many developers are struggling to secure financing in Austin. The financing amounts to $475,000 per unit.
The construction loan was arranged by Sean Borger and Garrett Newman of WelcomeLend, a tech-charged advisory based in Denver.
WelcomeLend did not disclose the lender, but described it in marketing materials as a “bank alternative” that allowed for higher leverage. The financing came at a 68 percent loan-to-value ratio.
While the financing will allow Geyser to actually build the development, the company has already put in years of work. Geyser acquired the parcels in late 2020 from an entity tied to David Suissa’s Lorda Corporation, property records show. At the time, it received a $3 million loan from Keystone Bank. Travis County records related to that loan show that it was extended this March through June.
It then upzoned the land to allow for 12 units per acre, from its previous zoning for six units per acre. The company’s website for the project calls it Common Ground, and says it will include some affordable units. Renderings show blocky wood facades with balconies and yard space. They center around a gently curving main road.
New home starts have slowed significantly in Austin. Builders began about 3,500 new homes in Austin last month, roughly equal to production in the months before the pandemic began. Construction boomed, along with housing prices, until midway through 2022 when the Federal Reserve began raising interest rates. In the last year, Austin home prices have fallen about 2 percent, and they are down 17.5 percent from the middle of 2022, according to Redfin.
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