PORTLAND, OR—Salpare Bay LLC has secured $38.9 million in construction financing through the investment banking firm George Smith Partners. The money will be used for the first phase of development on The Residences at Yacht Harbor in Portland, Ore.

“This property is positioned to become the premier waterfront, class-A, apartment community in Portland,” said Malcolm Davies, principal at George Smith Partners, in a statement.

Current plans call for 373 units in four buildings to be built on 25.13 acres. Units will vary in size from 950 sq. ft. to 1,455 sq. ft. and include features such as private decks, gas fireplaces, hardwood floors and granite counter tops. Amenities will include private beach, clubhouse, media room, business center, wine tasting bar, fitness center and picnic area. 

“Unlike many developments seeking construction financing, this property was shovel-ready, with no entitlement risks to the lenders. This is especially rare for the riverfront area of Portland, where there are several barriers to entry developers face during the entitlement process,” Davies said. “The fact that this parcel was already zoned, fully-entitled, and land use permit-ready for the development of The Residences at Yacht Harbor made this a very attractive and unusual investment opportunity in this market.”

With the money secured, construction will begin in the next 30 days. Phase I will mean the construction of two buildings and a total of 175 units.

“Our client decided to phase the development, which will allow the project to experience positive absorption between the two phases, bringing added cash flow during Phase II of construction,” Davies said. “The combination of low vacancy and little new supply means there is substantial potential for high rental demand. These factors made this investment a secure one, despite the volatility of the overall real estate market in recent years.”