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Deals & Dealmakers

3650 REIT Originates $49.5M Construction Loan for Alabama Multifamily Property

3650 REIT (“3650”), a nationwide commercial real estate lender originating and servicing portfolio loans for relationship borrowers, today announced that it has originated a $49.5 million loan to complete the construction of The Gabriel, a 288-unit multifamily asset located at 1542 Balch Road in Madison, Alabama – a submarket of Huntsville, the largest city in the state. The loan, originated from 3650’s Bridge and Event Driven (BED) investment platform, carries a term of 36 months and is provided to sponsor Hillcrest Acquisitions, LLC (“Hillcrest”), a New York-based family office with extensive experience investing in and developing multifamily and skilled nursing real estate properties throughout the eastern U.S.

3650 REIT Co-Founder and Managing Partner Jonathan Roth stated, “Today’s challenging market environment has enabled 3650 to step in to fill the gap and provide capital to borrowers that require a reliable source of financing. We experienced a strong and active first quarter of the year and have continued that momentum with the origination of The Gabriel loan and the further buildout of a growing pipeline of origination opportunities. The Gabriel project represents the opportunity for us to invest in a well-located asset in one of the strongest and fastest-expanding defense and STEM employment hubs in the country, making it an ideal housing option for residents in the area. As we see new and viable opportunities to strategically deploy capital across the country, we continue to live up to the mandate of our investors to lend responsibly and deliver consistent returns.”

The Gabriel project broke ground in the third quarter of 2022, and construction is approximately 20 percent complete. Once finished, the development will be comprised of 10 three-story, garden-style apartment buildings surrounding a central amenity area. It will also include 520 parking spaces, a luxury pool surrounded by cabanas and grilling/picnic areas, great lawn, fitness center, playground, dog park, pet spa, car care center, two electric car charging stations, gated access and enhanced technology packages for each unit. Capstone Building Corp. is serving as general contractor, and Williams Blackstock Architects designed the project. It will be delivered in phases and is scheduled to conclude in July 2024.

The Huntsville market’s rapid growth is attributed to several thriving industries in the area, including defense, aerospace, biotechnology and computer technology. The city’s recent job and population growth have significantly outpaced the national average, and employers have been drawn to the region based on its talent pool, business-friendly environment, affordability and stellar quality of life. Borrower Hillcrest selected 3650 for its ability to provide a fully capitalized debt structure and its experience with internal  construction loan servicing, as well as financing projects that are mid-construction.

“We are thrilled to be closing our first loan with 3650 REIT and look forward to this being the first of many loans together,” said Hillcrest Acquisitions VP Moshe Herskovich. “We strive to build long-term relationships with our lenders and find that 3650 shares our perspective on doing business. We believe that 3650’s in-house servicing capabilities and focus on the importance of direct relationships make them a great fit for our financing needs.”

In the first quarter of 2023, 3650 closed seven loans comprising $240 million across multiple asset classes and had approximately $13.6 billion of loans in servicing. Given its diversified national lending platform, proven ability to close quickly and extensive industry relationships, the firm continues to build out its origination pipeline with high-quality sponsors. 3650 is uniquely positioned to serve as a reliable source of capital as more lenders continue to pull back due to market uncertainty and liquidity constraints. Demonstrating its robust presence in the commercial real estate finance ecosystem, 3650’s three managing partners and co-founders were recently once again named to Commercial Observer’s The 50 Most Important Figures of Commercial Real Estate Finance list.

The Gabriel loan was arranged by Senior Managing Director Marc Tropp of Eastern Union Funding.

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