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BALCH SPRINGS, TX-A 296-unit multifamily complex has the Hall Financial Group stamp of approval, securing $2.2 million in preferred equity to jumpstart work on a project with a price tag of more than $20 million.

Earlier this year, Hall Financial set up a $100-million reservoir to buy stakes in commercial real estate. Until recently, hotels have gotten most of the cash from the structured real estate finance division’s war chest.

Three transactions, though, have been completed with multifamily developers, of which two belong to Dallas-based Seneca Investment Co. The latest nod goes to Seneca’s Stoneleigh at Bruton Apartments, a 30-acre development at 500 Bruton Rd. in Balch Springs on the southeastern side of Mesquite.

Hall’s investment, which has a four-year term, carries a minimum 12% current return and minimum 18% all-in return, Donald Braun, Hall Financial’s president, discloses to Additional returns could come from cash flow and profits either through a sale or refinancing. Braun is optimistic that the project will be providing returns well above the minimum.

Braun says “we’d like to do more multifamily. We do have a long track record.” That insight is one of the reasons that Seneca once again got its cash. The Stoneleigh has the aesthetics for success in its location and terrain, according to Braun. The complex will be ready to occupy in fourth quarter 2003. Seneca is led by Warner Stone, a multifamily developer known around town for high-end products.

The SouthTrust Bank in Alabama provided the construction loan, which amounted to 81% of the project cost. Hall’s share amounted to 11% of the construction cost, with Seneca kicking in 8%.

WSI Architects of Dallas designed the Stoneleigh at Bruton. Spring Valley Construction, also Dallas headquartered, is the general contractor.

In November 2001, Hall provided $1.7 million in mezzanine funding to Seneca Investment for the 186-unit Stoneleigh at Gracy Farms in Austin. The project delivers in January 2003.

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