Avila Real Estate Capital (AREC), a private real estate credit platform focused on residential development and homebuilding, announced the first closing of its second debt fund with approximately $100 million in investor commitments, including a lead partner investment from Hillwood.
The fund is targeting $1 billion in total commitments and expects to hold its final close on June 30, 2026. The new fund will continue AREC’s strategy of providing flexible financing solutions, including project-level loans for land development and builder revolver lines for vertical construction.
Hillwood is a privately held real estate and investment firm with operations across the United States and Europe. The company’s platform includes industrial development, master planned communities, urban development, construction services, and more.
“Our expertise in residential development and investments complements Avila Real Estate Capital’s focus on residential developers and homebuilders,” said Fred Balda, president of Hillwood Communities. “The partnership reflects alignment between two leading organizations committed to single-family residential development and the housing supply.”
AREC’s first debt fund closed in July of 2025 with more than $700 million in total commitments and co-investments from a base of institutional investors, family offices, and high-net-worth individuals. The fund has capitalized dozens of communities across the country, helping finance the construction of over 10,000 new homes.
In August, chief operating officer Oscar Vasquez told Builder the $700 million debt fund was a validation of AREC’s strategy and the need for flexible private capital to serve the homebuilding sector. CEO Tony Avila says the nature of the second fund and the participation of Hillwood further reinforces AREC’s approach.
“[Our approach] combines attractive yield, strong collateral, and short-duration exposure in a sector with durable long-term demand,” Avila said in a news release. “Ultimately our aim is to foster more housing supply in the United States by providing land developers and homebuilders access to operational capital.”
AREC’s approach in the private credit market combines finance and institutional lending expertise with the practical experience of licensed contractors and builders on staff. The high visibility failures of Silicon Valley Bank and First Republic Bank have only accelerated the trend of capital exiting the residential real estate sector and has made it more difficult for private builders and developers to access capital markets. Given the familiarly of the AREC team with the building sector, the smart capital it can provide, and the expertise of its staff, the organization is well-positioned to provide a solution for the industry.
AREC also benefits from strategic investments by major builders and land developers, reinforcing its deep alignment with the industry.
“We are seeing capital investors increasingly focused on asset-backed strategies that offer strong collateral coverage and predictive duration, and residential development fits that profile well,” Avila tells Builder. “Demand for for-sale housing remains resilient because supply is still well below long-term needs. As a result, capital allocators are looking for exposure to lenders that work directly with experienced builders and developers who can deliver finished lots and new homes into undersupplied markets.”
AREC’s funds provide structured credit solutions to help developers and builders manage growth, maintain liquidity, and meet the demand for for-sale housing across the country.
“Our short-term goal is to expand our ability to provide reliable, flexible credit solutions to land developers and homebuilders,” says Avila. “The current housing environment supports these plans since demand for for-sale homes remains strong and supple is constrained in many regions.”
