The Irving Music Factory — a Live Nation-anchored, mixed-use development in Las Colinas — is weighing its options to partner with a new long-term capital source, either debt or equity, that wants to bet on the project’s success.
The Las Colinas development, which has a build out cost with land north of $200 million, was put out to market by HFF this week looking for a new capital partner.
But Noah Lazes, president of The Ark Group of North Carolina, this will help form the developer’s long-term strategy and isn’t needed to complete the construction of The Music Factory.
“This has nothing to do with the project being for sale,” Lazes told the Dallas Business Journal.“This is fully leased and we are halfway through construction. We have a construction loan and we are reviewing our long-term debt strategy.
“Obviously, interest rates are going up at some point and we want to make sure we have the right kind of long-term financing whether that’s debt or equity or a combination thereof,” he added.
The Music Factory will have a 100,000-square-foot office for the Irving-based Ethos Group, a number of eating and dining options, and a Live Nation-anchored music venue— which converts easily from an intimate 4,000-seat concert hall to an 8,000-seat amphitheater — is being called the Pavilion at The Music Factory.
HFF is marketing The Music Factory’s interest in reviewing its capital options.
Lazes said he hasn’t gotten any response to the marketing materials, which went out to brokers this week. The project is big enough it could attract big institutional money, he said.
“It’s not secret, real estate cap rates are about as low as they are going to get and interest rates are as low as they will get,” Lazes told me. “It’s an appropriate time to figure out the long-term strategy for the debt and equity on the project.
“We don’t need a nickel to complete the project, but I do think this asset has long-term value and interest rates are going to go up, eventually, they have to raise rates,” he added.
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