Family Office Nets $50M Loan Backing Alabama Property

A rendering of The Gabriel in Madison, Ala. Image courtesy of Hillcrest Acquisitions and Williams Blackstock Architects

Hillcrest Acquisitions, a New York-based family office that invests in and develops multifamily and skilled nursing properties throughout the eastern U.S., has received a $49.5 million loan from 3650 REIT to complete construction of The Gabriel, a 288-unit community in the Huntsville, Ala., market.

The three-year loan was originated by the REIT’s Bridge and Event Driven investment platform and was arranged by Senior Managing Director Marc Tropp of Eastern Union Funding.

Hillcrest broke ground on The Gabriel, located at 1542 Balch Road in Madison, Alabama, a Huntsville submarket, in the third quarter of 2022. Construction is approximately 20 percent complete. The project will be delivered in phases and is slated for completion by July 2024. Capstone Building Corp. is the general contractor. Williams Blackstock Architects designed the project.

Once completed, the gated property will have 10 three-story, garden-style apartment buildings surrounding a central amenity area, as well as 520 parking spaces. Community amenities will include a swimming pool with cabanas and grilling and picnic areas, a great lawn, playground, dog park and pet spa, as well as a car care center and two electric car charging stations. Each unit will offer enhanced technology packages.

In a prepared statement, Jonathan Roth, co-founder & managing partner at 3650 REIT, noted that the project is located in one of the fastest-expanding defense and STEM employment hubs in the country. The area has various defense, aerospace, biotechnology and computer technology employers.

Despite market slowdown, 3650 REIT remains busy

The project is due online in July 2024. Image courtesy of Hillcrest Acquisitions and Williams Blackstock Architects

This is Hillcrest’s first loan with 3650 REIT, Hillcrest Acquisitions Vice President Moshe Herskovich said in a prepared statement. The lender was chosen because of its ability to provide a fully capitalized debt structure, its experience with internal construction loan servicing and its ability to finance projects that are in mid-construction.

In his remarks, Roth noted that the challenging market environment has enabled 3650 REIT to fill gaps and provide capital to borrowers that require a reliable source of financing. The firm had a strong and active first quarter and has a growing pipeline of origination opportunities, according to Roth. In the first quarter of this year, the firm closed on seven loans comprising $240 million across multiple asset classes and had approximately $13.6 billion of loans in servicing.

Last December, the lender originated a $76.5 million construction loan to finance completion of Elevate Apartments, a 293-unit, eight-story multifamily property in Dania Beach, Fla., being developed by Royal Palm Cos. The developer had broken ground in the fourth quarter of 2021. The property is scheduled for delivery in November. The loan was also originated by REIT 3650’s Bridge and Event Driven platform with a three-year term.