Harbor Custom Development, Inc. Closes Construction Loan with Sound Capital for $20,129,000 on Pacific Ridge Condominiums in Tacoma, Washington

Rhea-AI Summary

Harbor Custom Development, Inc. (Nasdaq: HCDI, HCDIP, HCDIW) announced a construction loan closure of $20.13 million with Sound Capital Loans, LLC for an 80-unit condominium complex in Tacoma, WA. This project aims to provide affordable options for first-time homebuyers, with expected unit prices ranging from $350,000 to $400,000. Tacoma's housing market experienced an 18.8% year-over-year sales price increase, significantly raising the median home price from $410,000 to $505,000.

Positive

• Secured a construction loan of $20.13 million for an 80-unit project.
• Caters to first-time homebuyers in a robust Tacoma housing market.
• Anticipated pricing for units between $350,000 and $400,000 addresses market gap.

Negative

• None.

Gig Harbor, Washington , Oct. 11, 2021 (GLOBE NEWSWIRE) -- Harbor Custom Development, Inc. (Nasdaq: HCDI, HCDIP, HCDIW, HCDIZ) (“Harbor,” “Harbor Custom Homes®,” or the “Company”), an innovative and market leading real estate company involved in all aspects of the land development cycle, today announced that it has closed a construction loan with Sound Capital Loans, LLC in the amount of $20,129,000 to build an 80 unit condominium complex in Tacoma, Washington.

Located less than ten minutes to downtown Tacoma’s urban core job market, the 80 condominiums will cater to first-time homebuyers searching for affordable options in the robust Tacoma area housing market. Harbor anticipates the one- and two-bedroom units will be priced between $350,00 and $400,000 and fill a significant need in the local marketplace. Tacoma has been one of the strongest housing markets in the nation. As of July 2021, Tacoma had an 18.8% year-over-year average sales price increase, raising the median sales price per home from $410,000 to $505,000 (https://patch.com/washington/seattle/seattle-tacoma-home-prices-see-sharp-yearly-increase).

Sterling Griffin, President and CEO of Harbor, stated, “The Pacific Ridge project is ideally located in South Tacoma less than ten minutes to the downtown core job market and approximately five minutes to the Joint Base Lewis-McChord entrance.”  Joint Base Lewis-McChord (JBLM) supports more than 40,000 service members, including active duty, National Guard, and reserve members and approximately 14,000 full-time civilian employees.  “As home prices continue to escalate due to record low inventory levels, first-time homebuyers are often priced out of the market. We are directly addressing this fundamental gap in the marketplace and believe offering condominiums priced under $400,000 in Tacoma creates an excellent growth opportunity for the Company while providing a highly desirous product for first-time homebuyers,” further stated Griffin.

David Huey, CEO of Sound Capital Loans LLC stated, “We are pleased to enter into this agreement with Harbor Custom Development and finance the construction of the Pacific Ridge condominium project in Tacoma, Washington. We welcome the opportunity to continue being part of Harbor's growth and believe that Pacific Ridge represents a great investment for Sound Capital, a solid addition to Harbor's growing portfolio and an opportunity to address the significant need for first-time home buyer inventory around JBLM. We have had great success working with Sterling Griffin and all of Harbor's team and look forward to continuing the relationship.”

About Harbor Custom Development, Inc.

Harbor Custom Development, Inc. is a real estate development company involved in all aspects of the land development cycle including land acquisition, entitlements, construction of project infrastructure, home building, marketing, sales, and management of various residential projects in Western Washington's Puget Sound region; Sacramento, California; and Austin, Texas. Harbor has active or recently sold-out residential communities in Gig Harbor, Bremerton, Silverdale, Bainbridge Island, Belfair, Allyn, Port Orchard, Lacey, Burien, Yelm and Blaine in the state of Washington. In addition, Harbor has acquired land and will begin constructing homes in three new markets. In the Sacramento metro market, Harbor will be constructing homes in completed subdivisions in both Rocklin and Auburn, California. In the Austin metro market, Harbor has acquired developed lot inventory in Dripping Springs, Driftwood, and Horseshoe Bay, Texas. The Company recently acquired property in Punta Gorda, Florida, and plans to begin construction of oceanfront condominiums there in 2022. Harbor Custom Development’s business strategy is to acquire and develop land strategically, based on an understanding of population growth patterns, entitlement restrictions, infrastructure development, and geo-economic forces.  Harbor focuses on real estate within target markets with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and increasing populations.  For more information on Harbor Custom Development, Inc., please visit www.harborcustomdev.com.

About Sound Capital, Loans LLC

Founded in 2007, Sound Capital (formerly Sound Equity) has raised hundreds of millions of dollars in investment capital to fund loans throughout various West Coast and Southern U.S. markets.  Today, they lend tens of millions per month, financing all types of new construction projects, including bridge, finished lot, ground-up and construction-completion loans.   Sound Capital’s vast knowledge of new construction lending provides for the flexibility of a customized loan structure based on a specific project’s characteristics.  With lending standards that prioritize experience and track record, high volume borrowers have access to rates and terms that are among the industry’s best.  For more information, visit www.soundcapital.com. 

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of the federal securities laws.  Words such as “may,” “might,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements.  These forward-looking statements are based upon current estimates and assumptions.  While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release.  These forward-looking statements are subject to various risks and uncertainties, including without limitation those set forth in the Company’s filings with the Securities and Exchange Commission.  Thus, actual results could be materially different.  The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

FAQ

What is the construction loan amount announced by Harbor Custom Development on October 11, 2021?

The announced construction loan amount is $20.13 million.

What is the purpose of the construction loan secured by Harbor Custom Development?

The loan is for building an 80-unit condominium complex in Tacoma, Washington.

What are the expected prices of the condominiums in Tacoma?

The one- and two-bedroom condominiums are expected to be priced between $350,000 and $400,000.

What was the year-over-year sales price increase in Tacoma as of July 2021?

Tacoma experienced an 18.8% year-over-year average sales price increase.

What is the significance of the Tacoma housing market for first-time homebuyers?

Tacoma's market is critical for first-time homebuyers due to rising home prices and low inventory.