Equity Sought for Texas Retail Project

A joint venture is looking for an equity partner to build a retail property near Austin without debt. Corner on Main, a planned 48,000-sf neighborhood center in the fast-growing suburb of Buda, is expected to cost $20 mil- lion to $25 million. The partnership, between Atco Properties & Management of New York and Austin-based CLD Realty, wants to fund that entirely with equity to avoid the volatile capital markets. Hodges Ward Elliott has the assignment.

Construction projects rarely are fully funded with equity, but the sales pitch for Corner on Main is that the approach is justified by the outsize returns investors can achieve building necessity retail in a booming suburb. That's particularly true as lenders continue to crimp their allocations for commercial real estate amid a broader market drop in property valuations.

The pitch highlights the strength of Buda, which has seen its population grow 121% since 2010, outpacing surrounding Hays County and the Austin metropolitan area, which grew 36% over that period. Multi-tenant retail properties in the Buda submarket are 100% leased.

Corner on Main, slated to comprise seven buildings, is about one-third preleased. It's at 2260 Main Street, at the corner of Fire Cracker Drive and near Interstate 35. The property is adjacent to Sunfield, a 2,700-acre master-planned community projected to have some 15,000 residents once completed. Average household income within a mile of the project is more than $132,000.

Downtown Austin is 13 miles north.