MARY ESTHER, FL - Walker & Dunlop announced that it structured $35,417,200 in construction financing through the United States Department of Housing and Urban Development (HUD) for Renaissance Santa Rosa in Mary Esther, Florida.
Formerly a nine-acre department store site adjoining the Santa Rosa Mall, the property will undergo a comprehensive redevelopment into a walkable, mixed-use community. The developers, Rea Ventures Group, LLC and Radiant Partners, were introduced to one another by Walker & Dunlop and are both longtime clients of the company. Together, the firms plan to utilize sustainable construction techniques to ensure the project will qualify for the National Green Building Standard (NGBS) designation.
"Renaissance Santa Rosa will be a separate, self-contained community, so residents won't feel like they're living next to a mall," said David Schonberger, a founding member of Radiant Partners. "We foresee this transition from a pure retail play to a mixed-used play being highly attractive for residents."
Walker & Dunlop's team, led by FHA experts, Frank Baldasare and Heather Olson, alongside capital markets specialists, Al Rex and Marty McGrogan, utilized HUD's 221(d)(4) construction program to finance the project. This program mitigates interest rate risk for the developers, combining both construction and permanent financing in a single fixed-rate loan. The team also secured a favorable interest rate for the clients by implementing HUD's Green mortgage insurance premium (MIP) reduction program.
Ms. Olson commented, "The HUD 221(d)(4) financing structure is a perfect fit for developers looking to revitalize aging retail locations with new multifamily and mixed-use developments. The low interest rate, 40-year loan allows our clients to maximize their leverage and provide the construction and permanent financing needed to create beautiful and sustainable apartment homes for our communities."
Said Mr. Rex, "We're seeing a lot of shopping center owners become creative in how they reposition vacated anchor tenants. They are collaborating with other real estate professionals to add alternative uses to utilize the excess land to enhance the center and value." Mr. McGrogan added, "Apartment complexes and hotels are two of the most popular new uses that retail landlords are choosing to explore. Creating a mixed-use center where people can live, work, shop, and dine is a perfect solution, and we foresee this becoming a useful model as properties evolve to meet the current user's demands."
Located along the "Emerald Coast" between Pensacola and Panama City and within two miles of the Eglin Air Force Base complex, Renaissance Santa Rosa is well-positioned to cater to military families and residents seeking a more urban lifestyle. Once complete in the fourth quarter of 2020, the luxury apartment complex will comprise four buildings with 229 one-, two-, and three-bedroom units. Each of the market rate apartments will include a private patio or balcony, in addition to premium fixtures and finishes. Community amenities will feature a two-story clubhouse, resort style pool, business center, gaming room, exercise facility, picnic areas, a playground, and a dog park. Meanwhile, the adjacent mall offers multiple retail, dining, and entertainment options to residents and visitors alike.