Walton Global, a real estate investment firm and sponsor of private placement offerings, announced the launch of a private placement fund for accredited investors, BLF Fund 2.
Walton says the BLF Fund 2 duration and projected hold period is up to five years and the target equity raise is up to $100 million.
The company says the fund is intended to support “top” U.S. home builders in the development of new homes in various markets throughout the nation and help close the housing shortage gap.
BLF Fund 2 relies on Walton’s builder land financing business model originally developed in 2020. Although the BLF business line has been in place for more than two years, the company says new, competitive terms were agreed upon in late 2022, which initiated the BLF Fund 2 offering.
“Our builder land financing strategy meets a growing market demand for ‘just-in-time’ inventory models that help our home builder clients secure their land supply,” said Bill Doherty, chief executive officer of Walton Global. “Even with shifts in the new home market over the last year, permits and starts are up month-over-month, and new homes sales are up over the last three months. Home demand from consumers is also projected to remain high in years to come. Land is a key component to home building, which makes our BLF offering a solution for home builders across the country.”
Walton explains that the fundamental strategy for builder land financing involves the company acquiring land identified by home builders and holding it. The home builder selects land, places a secure deposit with the land seller, conducts due diligence and then prepares the land for near-term development before bringing the land to Walton. If the land meets Walton’s criteria, the company acquires the land and places it under contract with the builder as homes are built.
Walton charges a premium payment to the builder for acquiring the land, which is paid out as current interest, with semi-annual payments and the original principal being returned proportionately to investors as homes are built and sold.
“We believe BLF Fund 2 is one of the most attractive fund offerings that Walton has extended to investors to date,” said John Sobotka, senior vice president of capital markets at Walton Global. “With all of the volatility in the market combined with the shortage of U.S. home supply, that various economists estimate to be four to six million homes, this fund can provide an alternative investment option with consistent cash flow in a relativity short period.”
Currently, Walton Global has a land pipeline of more than $200 million in builder land financing acquisition opportunities and growing.
Walton Global is a privately-owned land asset management and real estate investment company with $3.4 billion in assets under management.