A $50 million apartment project is coming to 323 W. Broad St. in downtown Boise – with some twists to its financing.
Roundhouse, the developer, broke ground on the 161-unit Cartee building even before the loan was secured, according to Jonathan Lee of George Smith Partners.
“They did this in order to lock in their construction costs with the building trades,” Lee said. “This was before we had secured the financing with US Bank.”
With Boise’s booming growth, construction costs are rising rapidly, and any delays right now can make a significant difference in costs, Lee noted.
GSP, a Los Angeles commercial real estate advisory firm specializing in complex financial structuring, was able to secure a loan for Roundhouse from US Bank at “amazingly cheap” rates, Lee said.
“Our role was critical because the Boise market is still viewed as secondary or tertiary given its relatively small size compared to places like Los Angeles and San Francisco,” Lee remarked.
According to GSP, there have only been one or two notable private equity transactions in Boise, which is the validation major lenders like US bank want to see prior to entering a market.
In order to get US bank comfortable with entering the development market in Boise, GSP had to demonstrate that Roundhouse, the Cartee project and everyone else involved in the development was of “institutional quality.” As a result, the firm was able to secure very favorable financing from one of the largest construction lenders in the country, Lee said.
“US Bank is financing 60% of the ($50 million) construction cost,” Lee said. “The other 40% is from Roundhouse itself. This is why they could start the project in December even before the loan was locked in.”
ESI, the general contractor for the Cartee, started work in late December with a planned completion date near the end of 2021, according to Katie Vila, Roundhouse COO.
“We named it after Lafayette Cartee, a Boise pioneer,” Vila said. “He built the first sawmill in Idaho and became the first surveyor general of Idaho Territory.”
The Cartee’s 161 units will include five live-and-work spaces, 42 studios, 60 one-bedroom units, eight two-bedroom one-bath units and 46 two-bedroom two-bath units. In addition, the building will have 175 parking stalls, 5,290 square feet of retail space and 10,488 square feet of community and amenity space, including roof top grilling and pet areas. In total, it will have 135,873 square feet of residential space.
Roundhouse, formerly known as LocalConstruct, was the developer of three other downtown Boise projects. The company converted the historic Owyhee Hotel into a mixed-use space of mostly apartments with some offices and retail. They also developed the Water Cooler apartments on W. Idaho and the mixed-use Fowler, just one block from the Cartee site.
Founded in 2008, Roundhouse both develops and operates of multifamily housing. The company currently manages a portfolio of over 4,000 multifamily residences.