By Jon Peterson
Denver-based The Pauls Corporation is planning on the development of the 470-unit apartment Indigo project in Redwood City located at 525 Middlefield Road. The total cost is projected to be in the neighborhood of $187 million, according to sources familiar with the project.
“We think that the residential market in Redwood City is now very dynamic from a demand perspective,” says Paul Towers, president of Pauls Corporation. He declined to comment on the development cost of the property.
Pauls is no stranger to developing projects in the Redwood City marketplace. It’s now planning the Peninsula Park development for 230 condos and 402 condo homes at the Pete’s Harbor development in Redwood City.
Indigo is part of a major development effort in downtown Redwood City. “This development is part of where the city has plans for the construction of 2,500 residential units for either condos or apartments and 500,000 square feet of office development for the future. This is a transit oriented development as there is a Caltrain stop in downtown Redwood City,” says Bill Ekern, director for the community development department for the City of Redwood City.
The Indigo project should get started this month. Pauls Corporation is doing the development in partnership with Mount Kellett Capital Management. This company is a hedge fund manager with offices in New York City and Dallas. According to its Web site, its investment strategy is focused on opportunistic real estate projects.
CBRE Capital Markets’ Debt & Structured Finance team has helped arrange $121 million of financing on the development. “The loan that we arranged is a construction loan. The project should have a 24- to 30-month construction time frame,” says Andrew Behrens, a vice chairmen with CBRE Debt and Equity Finance in its San Francisco office.
There were several people from CBRE that worked on this deal, including Brady O’Donnell in the Denver office, Behrens and Jesse Weber from the San Francisco office and Mike Bryant from the Dallas office. The debt on the property is a four-year floating rate loan through Wells Fargo. CBRE also declined to comment on the total development cost of the complex.
CBRE considers Indigo will be a high-end project. “The development will be a Class A project. It will be targeting technology workers that work either in the Silicon Valley or the Peninsula,” said Behrens.