Behringer Harvard, TCR Begin Construction of Luxury M-F Project in Houston
- Apr 03, 2013
Behringer Harvard is teaming up with Trammell Crow Residential to construct a 270-unit luxury apartment community on a 2.9-acre site in the Montrose/Museum District submarket of Houston.
Development costs were not released but a Q4 and Full Year 2012 Update presentation made March 15 by Behringer Harvard Multifamily REIT I, Inc. noted that the REIT’s share of total estimated costs of the project would be $51.2 million. The report stated the REIT had spent $13.1 million as of Dec. 31 on The Muse Museum District project.
“The Muse Museum District is in a location near the central business district that benefits from significant demand for a superior apartment product at competitive rents,” Mark T. Alfieri, COO of Addison, Texas-based Behringer Harvard Multifamily REIT I, said in a news release. “The property will offer luxurious finishes and proximity to major employment centers in Houston and it will appeal to young urban professionals.”
Trammell Crow Residential, a Dallas-based real estate firm that partnered with Behringer Harvard on the acquisition, will be the developer. An affiliate of TCR will serve as general contractor.
“We are excited to being construction of our second Houston development with Behringer Harvard and to continue our longstanding partnership with their firm,” Scot David, TRC senior managing director, said in the release.
The two companies are working on several projects together in Texas, including the Allusion West University project in Houston’s Inner Loop area. They are planning a 231-apartment community for that 2.5 acre site, which is located in the West University submarket near the city’s major highways. Behringer Harvard and TCR are also building a luxury community with 276 apartments and 23 townhomes in the Oak Lawn/Uptown submarket of Dallas. Both of those projects are also geared to young professionals.
The Muse Museum District community will consist of a four-story building on top of a two-level parking garage constructed at the intersection of Richmond Avenue and Montrose Boulevard. The site currently has 1960s-era housing that will be razed for the new project that is expected to be completed by late 2014. It is located about three miles from downtown Houston employment centers, including Texas Medical Center and Gateway Plaza. Restaurants and other nightlife are within walking distance.
Rents were not released for the apartments but they are expected to average 888 square feet and have up to two bedrooms and two bathrooms. Common area amenities will include a cyber café, business center, fitness center and swimming pool.
Houston’s thriving energy and health sectors have created pent-up demand for multi-family housing. Apartment vacancy rates are at levels not seen since 2006, according to Marcus & Millichap’s 2013 Market Forecast for Houston. The CRE services firm expects vacancy to drop 30 basis points in 2013 to 6.9 percent. It is forecasting asking rents to increase 4.5 percent to $852 per month.
Behringer Harvard Multifamily REIT I currently has investments in 52 multi-family communities in 14 states with a total of 14,374 units. Behringer Harvard creates and manages alternative investment programs for individual and institutional investors worth up to $11 billion. Last month, the REIT announced it was building a luxury multi-family community on a 1.15-acre site on Lawrence Street in downtown Denver. Tentatively called 21 Lawrence, it will be developed by Legacy Partners and have 212 apartments in a five-story building.
TCR, which has developed more than 225,000 multi-family units, owns 16,000 apartment units across the United States and is planning 3,000 new units this year.