A real estate investor that builds affordable housing in major U.S. cities has turned his focus to Dallas after receiving approval from the city to build 180 townhouses on land once owned by Potter's House Church and Clay Academy Charter School.
Steinbridge Group Founder and CEO Tawan Davis is planning to develop the build-to-rent townhouses in Dallas' Capella Park neighborhood, an area about 12 miles southwest of the Bishop Arts District on the west side of downtown Dallas. The homes will be built on three plots of land totaling about 15 acres that Steinbridge Group bought from the church and the charter school, Davis told CoStar News.
"These are large community-serving institutions, and this use is consistent with their missions and convictions of providing housing to families," Davis said in an interview. "This is right at the intersection of what is needed in the region."
Steinbridge Group purchased the land tracts from the church and charter school in 2022 for an undisclosed price. The $54 million project is Steinbridge Group's first project in Texas as well as the Dallas-Fort Worth region, the nation's fourth-largest metropolitan area with more than 8.1 million residents. The firm wants to add more projects in the region as the price of housing skyrockets in North Texas and the area continues to attract new companies and residents, Davis said.
The addition of the project to the real estate firm's portfolio comes nearly a year after Steinbridge Group announced a $100 million initiative with Historically Black Colleges and Universities to help close funding gaps at schools with real estate partnerships to develop housing on underutilized land.
Dallas project
The three-bedroom townhouses plan to utilize green energy design and materials that are sourced for being environmentally sustainable, Davis said. About 20% of the land will be developed into three parks for the neighborhood. Davis, who lives in Oregon, wanted to make sure there was green space for the community to thrive, he added.
Along with the Dallas project, Davis said the real estate investment firm has about 1,400 housing units in various stages of development, including more than a handful that have yet to be announced. The firm plans to develop two additional projects in the Lone Star State, he said, declining to disclose the sites.
"This has been such a difficult cycle, we've seen that anything can happen, and we want to have the projects fully baked with confidence in the execution before we talk publicly about them," he told CoStar News.
In offering some hints on where his team seeks to locate projects, Davis said they like to pick places where residents are housing burdened as home prices climb. The firm is offering build-to-rent townhouses that are 80% to 120% of a city's average median income, he said, straddling what he considers to be the "family in the middle."
Earlier this year, Steinbridge Group partnered with Virginia Union University on a $42 million project on its 100-acre campus in Richmond, Virginia's North Side. Last year, the firm teamed up with PNC Bank through the launch of a mortgage financing program in Philadelphia.
The two biggest hurdles for development right now are elevated interest rates and higher construction costs following hurricane damage throughout the southern United States, Davis said.
"This is the reason we continue to build," Davis added. "The more difficult the challenge and the harder it is to bring these houses to market; the need is even greater."