Austin-based Stratus gets funding for 2 new H-E-B-anchored projects

Oct 6, 2014
Austin American Statesman

Austin-based Stratus Properties Inc. has lined up nearly $70 million in financing, clearing the way for the developer to move forward on a pair of H-E-B-anchored mixed-use developments

One of the developments will be in Lakeway; the other is planned for Magnolia, a rapidly growing city northwest of Houston

In addition to the W Austin Hotel and Residences, Stratus’ past projects have included the Escarpment Village and Parkside Village shopping centers in Southwest Austin

“H-E-B is far and away the best all-around grocer in the markets they serve,” Stratus chairman and CEO Beau Armstrong told the American-Statesman. “They care very much about their employees and neighbors and absolutely obsess over meeting the needs of their customers. No detail is too small. We’re grateful for the opportunity to work with them to design and build high-quality properties.”

Stratus secured a $62.9 million construction loan from PlainsCapital Bank to fund the 245,983-square-foot Oaks at Lakeway project, which will be built on a currently unoccupied 90-acre site at 1900 S. RM 620, near Lohmans Crossing Road

In addition to a 95,000-square-foot H-E-B grocery store, the development will have 84,000 square feet of space for shops and restaurants, a 31,000-square-foot family entertainment center, a 120-room hotel and some single-family homes

It’s expected to open in October 2015, Armstrong said

The center will feature a number of eco-friendly features, Armstrong said, including extensive rainwater harvesting. Stratus also intends to seek LEED certification

A $3.75 million loan from Holliday Fenoglio Fowler LP funded the purchase of a 142-acre site for the mixed-use center in Magnolia. Eighteen of those acres were then sold to H-E-B for its store there

In addition to the H-E-B, the Magnolia Commons project is expected to feature a home improvement store, a 12-screen movie theater, a hotel, 10 pad sites for free-standing businesses and 50,000 square feet of space for shops and restaurants. A residential component will include as many as 1,400 multifamily units, according to Armstrong

Significant growth in Magnolia and nearby in The Woodlands community made the project appealing to Stratus, Armstrong said. The site the developer selected is seven miles from the nearest competitive retail center and is situated along roads that are set to see significant upgrades soon, he said

A timeline for when work will begin on Magnolia Commons hasn’t been finalized yet, Stratus said

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