Texas developer borrows $15M for first phase of lot build-outs for new community outside of Houston

Houston-based Windy Hill Development has secured a $15.3 million loan from the Dallas office of Vancouver-based Trez Capital to finance the build-out of 300 single-family lots for the first phase of what will ultimately be a 138-acre, 538-home community east of Houston.

Miami-based homebuilder Lennar is under contract to purchase all the lots within Indian Springs, which is located near the eastern shores of Lake Houston, according to a press release. John Hutchinson led Trez Capital’s Dallas team in arranging the financing.

It’s not clear if Lennar’s Indian Springs will be a build-to-rent community or if the homes will be for sale. Last year, Lennar launched a $4 billion platform to buy single-family homes and townhomes to turn into rentals, but the company has also joined the race into the build-to-rent market.

Connor Investment Real Estate — which recently acquired Houston’s 1,158-acre rail-served Gulf Inland Logistics Park, roughly a 30-minute drive from Indian Springs — provided equity to purchase the land and fund the infrastructure development for the first phase of Windy Hill’s project. The phase-one lots are expected to be delivered in 2023.

The Texas residential space has remained a seller’s market even as higher mortgage rates have tamped down the pandemic-driven housing boom nationwide. But there are signs that the Lone Star State’s high-flying market may be falling back to Earth.

Home sales in the Huston market fell 8.6 percent in June year-over-year — the third consecutive month of decline — and the number of active listings in that month was 27.4 percent higher than at the same time last year.

And the number of Houston home sellers cutting their asking price is on the rise. Redfin estimates that 38 percent of Houston homes on the market saw price reductions in June, while only about 25 percent of Houston homes dropped their prices at the same time last year.

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