A development project near the West 7th neighborhood in Fort Worth, Texas, provides much-needed housing inventory in one of DFW’s hottest districts.

The DFW area has experienced astounding growth in recent years. Companies like Charles Schwab, Toyota, and Amazon have moved to the area, and in 2020, DFW ranked first in raw population growth.

The population surge and business growth have also brought increasing demands for housing. To meet this demand, Swiss Avenue Funding has been teaming with developers across Texas to provide project funding. One of their recent projects is a new townhome project in the West 7th neighborhood.

In Fort Worth, the five-block urban village of West 7th bridges downtown and the Fort Worth Cultural District. It offers residents access to one of the most convenient “live-work-play” developments in the Dallas/Fort Worth area. The neighborhood is home to high-end nightlife, unique shops, and fine dining.

The new townhome project is also situated near Texas Christian University (TCU), a top-tier university with more than 10,000 undergraduates living on campus. TCU is in growth mode, and the university will need additional housing for undergrads and professors.

Smith Builders, co., the borrower, has more than 20 years in multifamily new construction. Company CEO Mark Smith grew up in DFW and has a grasp of the opportunities available in neighborhoods like West 7th.

When he approached the Swiss Avenue team about the project, he said, “We want to build new construction that will help modernize historic Fort Worth, while preserving the historic charm.”

This vision laid the foundation for developing the 14-unit, two-bedroom, two-bathroom, 1,250-square-foot townhomes.

Swiss Avenue CEO Zach Ghormley understood the needs of Smith and his team. The entire Swiss Avenue team quickly got to work, secured a capital partner, and quickly processed the closing.

Project Scope

The project is a ground-up new construction with 14 identical townhomes. Seven units are inverse to the remaining seven units to create symmetry. The project will be completed on a cleared lot of 14,200 square feet.

Units feature a modern kitchen with granite countertops, custom cabinets, tile backsplash, and stainless-steel appliances. The bathrooms will include a shower/tub combo, granite countertops, tile backsplash, and tile flooring in all wet areas.

Other features and amenities include heating and air conditioning units, carpeted living areas, ceiling fans, dishwasher and garbage disposal, and a landscaping package for added curb appeal.

Project Challenges

The borrower is a highly experienced builder who has completed many similar projects during his 20-year career. Yet the team faces challenges with rising construction costs and labor scarcity due to the lingering effects of the global pandemic.

These challenges have affected the intended ROI by increasing material costs and extending project timelines. DFW Developers are not unlike most developers experiencing similar issues during the pandemic, yet their unique ability to push the city for permit approval, complete major project milestones, and contain rising costs with imaginative solutions proves they are one of the best in the business.

Summary

There is an irrefutable beauty in the ability to create from a blank canvas. It takes a keen eye for design to integrate the aesthetics of a multi-unit build into an existing community with so much history. When a borrower and lender can come together on a vision for introducing a modern twist while respecting a community’s historic feel, it’s one of the keys to making the private lending industry so successful.

The West 7th Entertainment build showed true ingenuity to create real value for a neighborhood and satisfy a community’s demand for inventory.

Lender: Swiss Avenue Funding

Borrower: Smith Builders Co.

Location: West 7th Entertainment District, Fort Worth, TX

Architecture Style: Contemporary

Year Built: 2021

Square Feet: 1,250 per unit

Loan Amount: $3,765,462

LTV: 70%

ARV: $5,380,000

Credit Score: Yes

Client Borrower Experience: Expert developer

Interest Rate: 8% interest only

Loan Term: 18 months

Construction Budget: $3,000,000

Exit Strategy: For Sale Townhomes