Direct private lender Kennedy Funding has closed a $2.05 million land loan for The Beach Dallas LLC, facilitating the purchase of a significant land parcel in a rapidly growing area of South Dallas. The financing enables the acquisition of nearly 63 acres intended for future development, stepping in after the borrower's previous lender failed to complete the transaction over a three-year period.
Key Takeaways
- Kennedy Funding provided a $2.05 million loan to The Beach Dallas LLC.
- The loan is for the purchase of 62.696 acres of land at 2700 Simpson Stuart Road in Dallas.
- The deal was completed after the borrower's initial financing arrangement failed after three years.
- The property is located in a high-growth corridor of South Dallas, benefiting from major corporate relocations and population increases in the region.
Details of the Land Acquisition Financing
The financing package from Kennedy Funding is a crucial component of a $3 million land acquisition. The borrower, The Beach Dallas LLC, secured the $2.05 million primary loan to move forward with the purchase. This arrangement highlights the flexibility often required in complex real estate transactions.
A notable aspect of the deal structure is the inclusion of seller financing. The seller of the property has agreed to hold a second mortgage valued at $1.095 million. This cooperative structure, where the seller carries a portion of the financing, helped bridge the financial gap and bring the long-pending transaction to a close.
The Role of Direct Private Lending
Kennedy Funding operates as a direct private lender, a type of financing source that often provides capital more quickly and with greater flexibility than traditional banks. This capability proved essential for The Beach Dallas LLC, which had been under contract to buy the property for three years while waiting for its initial lender to deliver on its commitment.
The borrower was referred to Kennedy Funding by a broker familiar with the lender's reputation for executing deals efficiently. The successful closing underscores the importance of a reliable lending partner in time-sensitive real estate ventures.
What is Seller Financing?
Seller financing, also known as owner financing, is a real estate agreement where the seller of the property provides a loan to the buyer. Instead of the buyer securing a mortgage from a bank, the seller extends credit. In this case, the seller's $1.095 million second mortgage sits behind Kennedy Funding's primary loan, meaning Kennedy would be repaid first in the event of a default.
Overcoming a Three-Year Delay
The successful acquisition was a significant turnaround for the borrower, Christian Toxboe of The Beach Dallas LLC. The project had been stalled for three years due to the failure of the original lender to provide the necessary funds, a situation that can put a developer's capital and the entire project at risk.
Edwin Urrego, an executive loan officer at Kennedy Funding, commented on the common challenges developers face with unreliable financing partners. He emphasized that the ability to close a deal on time can determine its ultimate success or failure.
“What happened to Christian could have happened to anyone, and it illustrates just how often we see borrowers up against the clock because other lenders can’t close on time,” said Urrego. “That’s why choosing the right lender is often the difference between success and failure — and saving or losing huge amounts of money.”
This transaction marks the second loan Kennedy Funding has closed in the Dallas area this year, indicating the firm's active presence in one of the nation's most dynamic real estate markets.
Dallas Market Growth Fuels Development Demand
The urgency and potential of this land deal are framed by the explosive growth occurring in the Dallas-Fort Worth metroplex. The region's rapid population increase is a primary driver for new housing and commercial development projects.
Population Surge
According to recent data, the Dallas area experienced a significant influx of new residents, with nearly 178,000 people moving to the region between July 2023 and July 2024. This rapid growth creates substantial demand for new housing.
Urrego highlighted this trend as a key factor in the project's viability. “They all need a place to live, which makes projects like this one spearheaded by The Beach Dallas highly lucrative,” he noted.
Corporate Relocations Attract Talent
The population boom is closely linked to Dallas's success in attracting major corporate headquarters and operations. Over the last five years, more than 30 companies have relocated their main offices to the area. This includes prominent firms such as:
- AECOM
- CBRE Group
- Frontier Communications
- ATI
The Dallas-Fort Worth region has become a magnet for businesses due to several key advantages. The state's business-friendly climate, which includes no corporate or personal income tax, is a major draw. Additionally, its central location in the United States, a skilled and growing workforce, and less restrictive regulatory environment make it an attractive base of operations.
Strategic Location of the Property
The 62.696-acre parcel is located at 2700 Simpson Stuart Road in South Dallas. This area is well-positioned for future growth, benefiting from its proximity to major transportation infrastructure. The property is served by a regional highway network that includes Interstate 20, a critical east-west corridor.
This strategic location ensures that any future residential development on the site will offer convenient access to key economic and travel hubs. Residents will be able to easily reach downtown Dallas and the Dallas Fort Worth International Airport (DFW), one of the busiest airports in the world.
As the Dallas metroplex continues its expansion, undeveloped land parcels with strong logistical connections are becoming increasingly valuable. The acquisition by The Beach Dallas LLC positions the developer to capitalize on the sustained demand for housing driven by the region's powerful economic and demographic trends.
