Dealmaker: Walker & Dunlop Structures $102M

Walker & Dunlop, Bethesda, Md., structured $102.1 million in construction-permanent financing for two multifamily properties in Alabama and Florida.

ECLIPSE at CityCentre

In Huntsville, Ala., the firm secured $51.9 million in financing for ECLIPSE at CityCentre, a five-story, 278-unit multifamily project being developed by Spring Bay Property Co. The rental units will sit atop 18,000 square feet of restaurants and retail as part of the CityCentre at Big Spring master-planned project that RCP Cos., Huntsville, is building.

ECLIPSE at CityCentre is within a designated Opportunity Zone census tract. Created in 2017, Opportunity Zones encourage long-term investments in designated low-income areas by offering incentives in the form of lower or deferred capital gains taxes.

Led by Keith Melton, David Strange, Livingston Hessam and Jeremy Pino, Walker & Dunlop arranged the loan through HUD’s 221(d)(4) new construction program, which rolls both construction and permanent financing into a single loan. The team secured a two-year construction loan followed by a 40-year fully amortizing fixed-rate loan. The financing included a declining prepayment schedule for the first ten years after delivery and will be open to prepayment at par for the remaining 30 years.

“HUD has continued to prioritize projects located within Opportunity Zones, which allowed for this complex financing with a nuanced ground structure component to close within tight timeframes,” Melton said.

RCP Cos. Co-Founder Max Grelier said ECLIPSE at CityCentre will serve the robust STEAM (science, technology, engineering, arts and mathematics) workforce that is entering the Huntsville market.

Melton, Strange, Hessam and Pino also structured $50.2 million in 221(d)(4) financing for Mirrorton Apartments, a 305-unit multifamily development in a Lakeland, Fla. Opportunity Zone.

Located near the city’s historic quarter, Framework Group LLC’s Mirrorton Apartments development is part of downtown Lakeland’s ongoing revitalization. Because the community will provide workforce housing, it received tax incentives from the City of Lakeland and the Lakeland Community Redevelopment Agency.

Pino said the 221(d)(4) loan program is a good fit for revitalizing or developing apartments and mixed-use projects within Opportunity Zones. “Combining both construction and permanent financing into a single fixed-rate loan, the 221(d)(4) loan product is best suited for a long-term hold strategy,” he said, noting the structure and 42-year term align well with Opportunity Zone developments and re-developments, which require a minimum 10-year hold period to fully capitalize on the tax benefits.

Keith Melton Livingston Hessam RCP Cos. Walker & Dunlop