$16M Tuscany Rising in Hot Multifamily Market

LEWISVILLE, TX-Mockingbird Properties of Dallas has just broken ground on a $16-million apartment complex in Lewisville, a suburb north of Dallas now leading the region on under-construction multifamily product. The 288-unit Tuscany Gardens is going up on the southeast corner of Valley Ridge and Garden Ridge Boulevard.

Lewisville is emerging from the shadows of other Dallas suburbs as it gains developers’ attention, particularly from the residential crowd. As the population grows, the gap narrows between Lewisville and its upscale neighbor of Las Colinas/Valley Ranch. “There used to be a big difference in quality of product,” Greg Willett, research director for M/PF Research in Carrollton, tells GlobeSt.com. “But, in this latest generation of product, they’re getting pretty similar.”

The Tuscany project, also called Toscana at Valley Ridge on the developer’s Web site, will be competing for tenants in a 90%-occupied market where rent averages $750 per month. The Tuscany, though, is designed for the well-heeled and sure to fetch considerably more on the open market. The complex is to deliver by July 2003. It was designed by in-house architect David Cannon and will be built by Shreveland Construction Co.

Mockingbird Properties, led by Mitchell Vexler, got its project off the ground with a near $13.8-million loan arranged by Houston-based L.J. Melody & Co.’s Randy Fleisher, a director in Dallas. He says the three-year loan represents 84% of the construction costs. It was provided by Birmingham, AL-based South Trust Bank at 235 basis points over the 30-day LIBOR.

Lewisville fell in 12th place for absorption in the Dallas-Fort Worth metroplex, according to M/PF’s Q2 report. It leads the region’s new starts, with 1,498 under way in M/PF’s boundaries for the Lewisville submarket. Those breaking ground in the second quarter were Billingsley Co.’s Austin Ranch II in the Colony, 446 units; Trammell Crow Residential’s Alexan Vista Ridge at 350 E. Vista Ridge Dr., 300 units; Capstone America’s Oaks of Vista Ridge at Highland Drive, 288 units; Westwood Co.’s Watermark in the Denton County section of Roanoke, 240 units; and Univesco’s Remington at 41 N. Old Orchard, 224 units.

In all, the DFW metroplex has 13,285 units under construction. More are coming, says Willett. In the past year, multifamily building permits rose two-thirds from the prior year. “That jump is one of the most pronounced increases seen anywhere in the country,” he explains.

At the second quarter close, demand jumped 4,750 units from April to June. “The return of positive apartment demand is especially encouraging given that top-end properties continue to lose significant numbers of residents who are taking advantage of low interest rates and moving on to purchase single-family homes,” Willett says in the report.

Occupancy overall is 92.2%, 0.3 points higher than March but still off from midyear 2001. Rent effectively is flat. “Rent achievement is being sacrificed to retain existing residents and bring new renters through the front door,” Willett concludes. But, it also depends on location. A 4% gain in the past year came through for Duncanville, Northwest Tarrant County and Ridgmar/Ridglea while a 4% loss hit Richardson and Northeast Tarrant County.