Keith Melton
HUNTSVILLE, AL—Walker & Dunlop has structured $51.9 million in financing for ECLIPSE at CityCentre, a five-story, 278-unit, multifamily project here. Located in Huntsville's Downtown area, the property is within the bounds of a designated opportunity zone census tract.
Walker & Dunlop Senior Managing Director Keith Melton tells GlobeSt.com that his firm currently has more than 25 multifamily projects totaling over $400 million in the Huntsville MSA. Walker & Dunlop has also financed or facilitated investment sales for multifamily assets in Birmingham, Montgomery and Mobile.
"Walker & Dunlop has witnessed consistent rent in the Huntsville MSA resulting in additional inquiries for new construction, refinances or acquisitions of multifamily assets in the area," Melton says. "The Huntsville MSA has strong job growth from market drivers like the new Toyota plant, private companies utilizing the intellectual capital formerly with NASA in Huntsville and Redstone Arsenal." He adds that most market analysts anticipate the city populations of Huntsville exceeding the city populations of Birmingham by 2025 as the largest city in Alabama.
Walker & Dunlop arranged the loan through the US Dept. of Housing & Urban Development's (HUD) 221(d)(4) new construction program, which includes both construction and permanent financing in a single loan. The team worked to ensure the financing terms were consistent with opportunity zone guidance, securing a two-year construction term followed by a 40-year, fully amortizing, fixed-rate loan.
The financing also features a declining prepayment schedule for the initial ten years post-construction and is open to prepayment at par for the remaining 30 years.
To fully capitalize on opportunity zone benefits, the developer is required to hold the asset for a minimum of 10 years, making HUD's long-term financing program an ideal fit, Melton said.
"ECLIPSE at CityCentre will serve the robust STEAM (science, technology, engineering, arts, and mathematics) workforce and the next generation that is entering the market, said Max Grelier, co-founder of RCP Companies. "The project will provide built-in demand for the authentic blend of live, work, play, shop amenities we have planned for CityCentre, which is a critical piece in Huntsville's revitalization of downtown."
Co-developed by Spring Bay Property Company, the property will sit atop 18,000 square feet of upscale restaurants and retail and is part of the CityCentre at Big Spring master-planned project being developed by RCP Companies.
Once complete, ECLIPSE at CityCentre will include a mix of studios, one-, and two-bedroom units with open concept floor plans and nine-foot ceilings.
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