About this Property in Magnolia, TX – Vertical Construction Loan

Magnolia, TX — Industrial Construction Financing

Loan Amount: $3,550,000
Loan Type: Construction Loan ( Industrial Business Park)
Property Type: Multi-Building Industrial Development
Use of Funds: Complete vertical construction and deliver finished industrial units for lease or sale

Overview

Enact Partners provided financing for a borrower developing a multi-building light industrial project in Magnolia, Texas. The site was fully entitled and shovel-ready, located along a well-traveled corridor within the Houston metropolitan area — a submarket known for sustained small-bay industrial demand. The borrower had already invested significant equity and preparation work prior to closing, setting the stage for a streamlined construction phase supported by disciplined project oversight.

The development consists of several small-bay industrial buildings designed to accommodate multiple tenants, each with warehouse space and limited office buildouts. The project targets the strong regional demand for flexible-use industrial space serving local businesses and trades.

Loan Structure

The $3.55 million loan was structured to fund completion of vertical construction from mid-phase through certificate of occupancy. Key elements included:

• As-Drawn Interest with Reserve: Ensuring smooth funding throughout construction milestones
• Construction Holdback: Dedicated funds for remaining improvements, plus a lender contingency for cost control
• Collateralization: First deed of trust and assignment of rents on the property
• Exit Strategy: Flexible options including property sale or refinance with a traditional lender

Market Considerations

Magnolia’s industrial submarket has seen consistent absorption as users seek smaller, flexible spaces near Houston’s core. The property’s frontage along a busy corridor provides strong visibility and access for tenants, while its zoning and infrastructure support long-term adaptability. The site plan allows individual units or entire buildings to be marketed to owner-users or investors, providing multiple exit pathways.

Execution and Oversight

Enact Partners’ due diligence included a third-party appraisal, plan and permit verification, and contractor evaluation. The approved construction budget was reviewed and validated through independent cost analysis. The borrower’s financial commitment and prior investment strengthened the project’s foundation.

Outcome

The Magnolia project demonstrates how Enact Partners supports borrowers with well-positioned, fully entitled developments that align with regional demand. The structured financing enabled the sponsor to advance construction while preserving flexibility for sale or refinance.