Financing: Upper Kirby Project Gets $166M

In Houston, Nashville-based Southern Land Co. has secured a $165.9 million senior construction loan for 2811 Kirby, a multi-use development going up on nearly two acres in Upper Kirby. The loan was provided by Bank OZK.

2811 Kirby, which broke ground earlier this year, will offer 331 apartments, including 18 penthouses, in a 38-story tower called Lily River Oaks. A separate 10-story commercial tower will have 107,000 SF of Class AA office space. The seventh floor spanning both towers will have a spa, fitness center, and garden deck for use by residential and office tenants. Stream Realty Partners is handling office leasing.

A number of concrete trucks lined up outside the project on Wednesday delivering wet concrete for what appeared to be a major foundational pour.

“We are pleased to reach this important milestone as construction gets in progress on our first development in Houston,” said Tim Downey, founder and CEO of Southern Land Co. “Securing this financing from Bank OZK reflects the strength of the project and our confidence in the opportunity to create something truly special in Upper Kirby. 2811 Kirby is designed to be a landmark destination where people can live, work, dine and gather, while complementing the character and energy of one of Houston’s most distinguished neighborhoods.”

2811 Kirby. Courtesy Southern Land Co.

Located just south of Westheimer, 2811 Kirby is near the River Oaks neighborhood, about four miles from downtown Houston. The 953,000-SF development will have 15,000 SF of restaurant and retail space and structured parking.

“Tenants today are prioritizing quality, experience, and location, and 2811 Kirby checks all three boxes,” said Dustin Downey, Chief Investment Officer, Southern Land Co. “We’re already seeing strong interest from groups looking to relocate to Upper Kirby, and this project will offer a level of design, connectivity, and Class AA office space that doesn’t currently exist in the Houston market.”

Houston’s overall office vacancy rate is 25%, as stated by Cushman & Wakefield. Leasing has been strong in newer buildings, where the supply of available space is more limited.

2811 Kirby is one of only two for-lease office buildings currently under construction in the Houston area, along with the 118,500-SF Autry Park nearby.

As companies seek offices with the best amenities and locations, as many as a dozen new buildings could break ground in Houston in the next few years, as stated by top leasing experts.

The 2811 Kirby project team includes Solomon Cordwell Buenz (SCB) as architect and interior designer, Kimley-Horn for civil engineering, DeSimone Consulting Engineering, and Andres Construction, the general contractor. Southern Land Co. is handling landscape architecture.

Southern Land Co. has developed single-family and multifamily properties in Texas since 2006. Current projects include Tucker Hill, a single-family community in McKinney; Lunaroya, a 66-lot, single-family community in Dripping Springs; and Deco, a 27-story luxury multi-use community in Downtown Fort Worth.

Tony Marchbanks

The company recently appointed Tony Marchbanks as National President, Homebuilding. Based in the firm’s Plano office, Marchbanks previously served President and Chief Operating Officer of Highland Homes. He launched Highland Homes’ Houston market from the ground up, growing it to 1,000 homes annually, and later led statewide operations producing more than 4,000 luxury homes each year.

Southern Land Co. has $8 billion worth of projects in the pipeline in Tennessee, New York, California, Texas, Colorado, Pennsylvania, North Carolina, South Carolina, and Nevada.