Knighthead Funding provided local Austin developer Pearlstone Partners with a $7.14 million loan for the acquisition of a residential development site located in the East Riverside neighborhood of Austin, TX. The site will be redeveloped as a 296-unit condominium project.

The 10-month, interest-only first mortgage financing was secured by 2500 Willow Dr., a 104,554 square foot property southeast of downtown Austin. This is Pearlstone’s seventh transaction in the Austin area financed by Knighthead.

The 2.73-acre property is situated within four miles of downtown Austin with nearby Interstate 35 offering easy access to the capital city’s employment centers, and the many surrounding restaurants, retail offerings, and cultural attractions.

Construction of the condominium project, which will also include street level retail, is expected to begin within the next eight months. Like Pearlstone’s previous projects financed by Knighthead, this development will target the middle-market buyer.

“With Austin’s impressive continued growth comes the need for more housing, specifically, new, high-quality yet attainable for-sale product that caters to the young, dynamic workforce that is attracted to the robust employment opportunities there,” said Knighthead Principal Jonathan Daniel.

“We’ve partnered with Pearlstone in each of the last three years and continue to admire their strong track record and strategic approach within this middle-market housing niche,” added Knighthead Vice President Henry Boeckmann. “Future residents will embrace the outstanding condominium product and amenities, as well as the East Riverside neighborhood’s amenity base, proximity to the CBD and access to public transportation.”

The fastest growing city in the country since the last U.S. Census, Austin has expanded by roughly 29 percent since 2010. The population boom, including a young, highly educated workforce, has attracted employers that have delivered high-paying jobs, fueling a growing need for quality housing in the market.