Argosy Invests in The Parker Apartments
On December 19, 2012, Argosy Real Estate made a controlling equity investment in The Parker, a 177-unit Class-A apartment development project in the Pearl District neighborhood of downtown Portland, Oregon. Argosy has partnered with Astor Pacific, led by Robert Ball, as operating partner. Astor Pacific has over 20 years of experience in multifamily development and operations in the Portland market and will manage construction and lease-up of the asset. Astor Pacific is also a 20% co-investor.
The Parker will include 177 rental units in a single six-story building with five floors of wood frame construction over two floors of concrete parking (one underground), with a total of 165 parking spaces. The Parker will include a variety of floor plans with an average unit size of 670 square feet. Smaller unit sizes are popular in the market and are designed to appeal primarily to single young professionals. The Project will be built on an approximately one acre site. The building will be elevator served with central access corridors and will include a variety of amenities including a courtyard with a BBQ area, a fitness center, coffee bar and community room. The exterior material will be a combination of panels, brick veneer and glass with decorative bay windows surrounding the building at the ground level. Unit interiors will offer stainless steel appliances, granite countertops and hardwood floors. The Project is designed to achieve a minimum of LEED for Homes Gold certification and may potentially reach the Platinum level of certification.
The site is large for an infill location and is currently improved with a vacant industrial building which will be demolished. The Pearl District is one of the preeminent urban renewal success stories in the United States and is a highly desirable residential area due its vibrant mix of art galleries, loft apartments, condominiums, office buildings, boutiques, restaurants, pocket parks and performance spaces. Portland, the Pearl District in particular, has one of the lowest apartment vacancy rates in the U.S. The new supply pipeline in the Pearl District is minimal and The Parker is currently the only apartment project planned for delivery in 2014 in the Pearl District.
Initial abatement work and demolition commenced in late December 2012, with construction scheduled to begin in January 2013. Initial occupancy is projected for July 2014, with full lease-up and stabilization anticipated by July 2015. Construction-to-permanent financing is being provided by the Department of Housing and Urban Development (HUD) through its HUD 221(d)4 program, which offers non-recourse, assumable debt with a 40-year term and a fixed interest rate. The HUD loan for the Project closed on December 21, 2012. The base fixed interest rate is 2.64%, plus a 65 basis point mortgage insurance premium, for an all-in rate of 3.29% fixed for 40 years.