Legalist Provides $50M Credit Facility to Bring Developer Past Chapter 11 Bankruptcy
Arete Real Estate & Development has gotten into trouble developing a 571-acre land deal outside Houston
By Brian Pascus August 8, 2024 12:52 pm
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A local real estate developer in Houston is counting on a credit infusion to bring it through bankruptcy.
Arete Real Estate & Development has secured a $50 million financing package to navigate a Chapter 11 bankruptcy over its planned development at 50 Crosby Pines, a land deal in Crosby, Texas that holds the potential for more than 2,700 single-family units, Commercial Observer has learned.
Legalist, a private credit investment firm, supplied the $50 million loan, which is structured over an 18-month term and includes low leverage. The debtor-in-possession financing is expected to help Arete reorganize and restructure its business, while some of the funds will also go toward development of the paused project.
“This financing package demonstrates Legalist’s ability to navigate complex bankruptcy scenarios while identifying and supporting promising real estate opportunities,” Chris Wren, portfolio manager at Legalist, said in a statement.
50 Crosby Pines is currently 521 acres of vacant land sitting roughly 25 miles outside of Houston. But Arete has indicated its desire to build up to 2,750 single-family lots on the property.
The new credit secured through the bankruptcy reorganization has helped Arete secure takedown contracts with seven national and regional homebuilders, according to Legalist.
“By providing essential capital in a challenging environment, we’re not only facilitating the reorganization of our borrower but also contributing to the growth of Houston’s vibrant housing market,” said Wren.
Arete was founded in 1990 in Houston. The firm did not respond to requests for comment. Brian Pascus can be reached at bpascus@commercialobserver.com
