As traditional bank lending tightens, especially in sectors like homebuilding, private credit firms such as Avila Real Estate Capital are stepping up to fill the void. Avila entered this space three years ago, identifying the gap left by regional and mid-sized banks that once funded land developers and private homebuilders but have significantly scaled back since the financial crisis.
To explore Avila’s strategy, we spoke with Oscar Vasquez, Chief Operating Officer, about the challenges they’ve faced and how they leverage technology to streamline decision-making.
Q: Oscar, thanks so much for your time, and congratulations to Avila on all of its recent fundraising success: You had the final closing of your first debt fund in July where you secured more than $700M in total commitments and coinvestments. Tell us about your strategy, and what makes AREC compelling to LPs?
Vasquez: Our strategy focuses on making senior debt investments that finance the acquisition, development, and vertical construction of entitled land and for-sale homes in markets with strong and sustained housing demand.
A key pillar of our strategy is maintaining licensed contractors and experienced development professionals in-house, providing us with firsthand insight into the capital needs, project timelines, and operational realities faced by homebuilders and developers.
We primarily hear positive feedback from our LPs around two aspects of our approach:
First, our loans benefit from meaningful subordination through developer equity and buyer deposits beneath our position. Moreover, in the rare event of a default, our experienced team, backed by our homebuilder limited partners, is well equipped to step in, manage, and preserve value from the underlying assets. This combination of robust structural protections and hands-on operating expertise provides investors with enhanced downside protection.
Q: Your firm specializes in strategic capital and has funded more than $800M in AD&C (acquisition, development, and construction) financing. You also have well-defined criteria for projects you will fund, but it’s often harder to decide what opportunities not to pursue.
Are there deal opportunities you’ve encountered in recent memory that appeared investment-grade on paper, but you decided not to pursue? What did your instincts tell you about those deals?
Vasquez: Of course. We underwrite 10+ deals for each one that eventually passes through our Investment Committee. Certainly, we listen to our instincts but we support our due diligence with robust data-driven analysis.
We have passed on otherwise compelling opportunities for a variety of reasons including: lack of entitlements, lack of sponsor equity or “skin in the game,” insufficient demonstrable sales absorptions, or unacceptably high supply of unsold homes in the surrounding market.
Q: Residential construction trends are well-publicized. What’s a relevant trend that’s going under-noticed but is having an impact on the capital markets?
Vasquez: Regarding construction trends, the homebuilding industry is like an aircraft carrier—it takes a while for changes in strategy and direction to be felt in the market. There have been well-publicized sales slowdowns as inventory has increased in many markets. Builders are pulling back on starting new homes, and industry analysts expect inventory to normalize in 2026.
With regards capital markets, the primary trend that got us into the lending sector 3 years ago was the pullback of institutional credit. This market (land developers and private homebuilders) was served by regional and mid-sized banks for decades, and the trend of banks pulling out of the sector which began after the GFC only accelerated after the highly visible failure of banks such as Silicon Valley Bank and First Republic a few years ago. This constriction of capital markets for the homebuilding sector created an opportunity for private lenders to finance this important component of the US housing industry.
Q: We recently wrote a thought piece on “Strategies for Creating Operational Alpha”, which posits that organizational structure, internal culture, and technology can create a competitive edge for GPs beyond investment returns.
Avila prides itself on creating alpha through “fast, streamlined decision-making.” In the context of org structure, culture, and technology, how has Avila set itself up for fast decision making?
Vasquez: We have structured our team vertically to integrate professionals with deep experience in development and homebuilding alongside experts in finance, lending, and capital markets. This structure ensures that every investment decision benefits from both technical, on-the-ground insight and disciplined financial analysis.
Our culture emphasizes transparency, accountability, and communication, which allows decisions to move quickly from evaluation to execution. By combining practical development expertise with institutional-level underwriting and risk management, we can assess opportunities efficiently and act with confidence.
Technology is also key in helping us be responsive while also being rigorous. Our team uses Juniper Square and other systems to centralize deal data, streamline approvals, and maintain visibility for leadership across all active investments. This combination of structure, culture, and tools enables us to move decisively while maintaining discipline—creating a real and repeatable source of operational alpha for our investors.
Q: Finally, we’re proud to be a fund operations partner to Avila. What makes Juniper Square different?
Vasquez: Juniper Square stands out for its commitment to transparency, efficiency, and data integrity across the entire investment lifecycle. At Avila Real Estate Capital, our ability to make fast, disciplined decisions is enhanced by Juniper Square’s technology, which streamlines investor communication and provides real-time visibility into fund performance. The platform complements our vertically integrated team, which brings together homebuilding and development expertise with institutional lending experience, allowing us to execute with speed, precision, and confidence on behalf of our investors.
We also are extremely excited by Juniper Square’s recent acquisition of Tenor Digital, an AI-enabled Credit Platform. We think this combination of Juniper Square’s CRM & Fund Administration capabilities with an industry-specific solution like Tenor Digital will provide tremendous benefits to institutional fund managers and investors with a credit component.