Thor Equities to Start Construction of $125 Million Houston Project in October

September 29, 2015

Thor anticipates leasing to pick up once construction is underway

The oil slump has cooled Houston’s once-scorching economy, but New York developerJoseph Sitt is diving in anyway.

Mr. Sitt’s development company, Thor Equities, intends to start construction on Oct. 5 of Kirby Collection, a 1 million-square-foot assortment of apartments, offices, shops and town homes in Houston’s central River Oaks neighborhood.

The project is expected to include 199 rental apartments, seven town homes, 210,000 square feet of office space and 65,000 square feet of shops. No commercial tenants have signed leases thus far.

The ground breaking comes after Thor last week landed a construction loan from Bank of the Ozarks and a mezzanine loan, which together cover roughly 65% of the project’s estimated development cost of $125 million.

The developer’s plan isn’t necessarily risky, since the economy in Houston, an energy hub, continues to expand despite the oil slump. But job growth slowed to a net addition of 41,900 jobs in the past 12 months from 102,500 in the previous year. Permits for single-family homes are down 2.4% in the first eight months of this year from last year, following an 8.6% gain in the previous year.

Melissa Gliatta, an executive vice president at Thor, said the company anticipates tenants will start committing once construction of the project has started.

“We don’t have concerns,” she said. “We have put a lot of time and energy into it. We’ve done a lot of studying of this market.”