A $12 million facility unlocks a strategic pivot, demonstrating how nimble capital deployment outperforms size in today’s more challenging housing climate.

In the grand chessboard of homebuilding capital, not every move needs to be a billion-dollar splash to change the game.

For Lokal Homes, a Denver-based private homebuilder, a $12 million credit facility arranged with Avila Real Estate Capital, an affiliate of Builder Advisor Group, this spring is a prime example. It's not a megadeal. But it is, unmistakably, a pivot point. One that illustrates how access to the right capital—not necessarily the most—can reset a builder’s trajectory in a volatile market.

Call it a contrarian advantage.

While much of the housing industry remains paralyzed — stagnant due to high interest rates, affordability challenges, and regulatory uncertainty — Lokal is moving forward. They're using this infusion of capital to make a purposeful move away from their first-time buyer-heavy product mix and into higher-price-point single-family homes, including neighborhoods aimed at discretionary move-up and 55+ buyers.

We just decided we were going to do this—like, I don’t know, four months ago,” says Ryan Lantz, co-founder and co-owner of Lokal. “And we’re already active in a new community. We’ve got others teed up. That kind of speed and execution requires capital partners that can move with you.”

Why Capital Access Is the New Strategic Advantage

Lokal’s move comes at a moment of unusual challenge—and opportunity—for private homebuilders. Demand fundamentals are strong: population growth, migration, and household formation trends haven’t disappeared. However, buyers have become cautious, weighed down by 7% mortgage rates, high home prices, and growing unease in the job market. Many are stuck on the sidelines waiting for either pricing or clarity.

For builders, especially those without public balance sheets or land-banking affiliates, the path forward is unclear. They're forced to double down on conversions—offering aggressive incentives, mortgage rate buydowns, and deep discounts—to keep pace with last year’s absorption. At the same time, they’re asked to chart a path into the next cycle, one that might reward entirely different product and price-point strategies.

This is where capital flexibility becomes strategic fuel.

There are strong, well-capitalized private homebuilders and public companies making acquisitions—including AD&C [acquisition, development, and construction] moves—because they see near-term windows,” says Tony Avila, CEO of Builder Advisor Group. “If you can move quickly into land positions, you can activate fast, you can grow sales and margins by offering what’s still moving.”

That’s exactly Lokal’s plan. And it’s working.

The Deal Behind the Pivot

Lokal’s $12 million facility—initiated in early May and finalized in June—enabled the company to refinance $3.2 million in existing lots across two Denver-area subdivisions: Jackson Creek in Monument and Victory East.

Jackson Creek targets the move-up buyer, with homes averaging $800,000. Victory East caters to the more price-sensitive buyer, offering single-family homes in the $420,000 range. Together, these communities embody Lokal’s hedged approach: creating product optionality across price segments and reducing exposure to the inflation- and rate-pinched entry-level market.

Our average home sale used to be around $500,000,” Lantz says. “That buyer has been hit hard. We're still committed to that segment, but we’re also diversifying. We’re shifting toward single-family homes at a higher price point. And we’re putting land under control that lets us serve both ends.”

The partnership with Builder Advisor Group also offers something that traditional banks can’t currently provide: stability.

In the private lending world, it’s the same people making the same decisions, delivering the same kind of capital,” says Lantz. “Every private lender we’ve ever worked with is still a partner today. The same cannot be said of the banks.”

Indeed, rising interest rates and increased regulatory scrutiny have made banks less reliable and slower capital partners. Lending covenants are tighter, turnaround times longer, and underwriting standards more erratic, even for repeat borrowers. For builders like Lokal, that uncertainty introduces friction at the exact moment they need to act quickly.

Why Smaller Can Mean Smarter

Lokal’s approach reflects a broader shift occurring across the U.S. residential development landscape. Builders are moving from land-heavy, speculative postures toward capital-light, product-smart, and velocity-oriented models. The recently announced Five Point Holdings acquisition of a controlling stake in Hearthstone is a prime example: a long-term bet that off-balance-sheet capital flow will define the next wave of homebuilding growth.

As that deal underscores, the key to resilience is optionality—having the ability to pivot quickly when the market says “go.” And for builders without massive balance sheets, that means finding capital partners who not only understand housing operations but can also deploy capital quickly, tailor terms, and remain committed when the cycle turns.

That’s precisely what Lokal found in the Builder Advisor Group team.

They know the industry,” Lantz says. “They understand what we’re doing at a deep level. So they can craft specific capital structures that make sense, without adding unnecessary risk. They’re not trying to overcomplicate things with covenants that don’t apply. It’s a partnership, not just a transaction.”

Lessons for the Broader Market

For other builders navigating this challenging moment, Lokal’s experience offers a few key takeaways:

1. Private debt is more consistent than it looks
   While bank lending has become more capricious and consolidation-prone, many private lenders remain relationship-driven and long-term focused. Institutional knowledge matters—and so does capital with operational empathy.
2. Speed is a competitive advantage
   Lokal’s ability to transition from strategic decision to land acquisition to product launch in under four months demonstrates that nimble builders can still win—even in this climate—if they have the right financial foundation.
3. Diversification is about more than location
   Shifting from attached townhomes to single-family homes and from entry-level buyers to discretionary purchasers gives Lokal a broader absorption runway—and a hedge against prolonged affordability gridlock.
4. Smaller deals can signal bigger bets
   At $12 million, this recapitalization isn’t flashy. But it’s consequential. It sets Lokal up for longer-term growth—and sends a message to would-be competitors: we're still playing offense.
5. Strategic clarity requires the right partners
   Builders don’t just need money—they need clarity. Capital that comes with understanding and partnership allows for smarter, more disciplined decisions. And those decisions compound into stronger positioning when conditions improve.

The Bottom Line: Strategic Nimbleness Over Strategic Scale

In an environment where uncertainty reigns and macro visibility remains elusive, Lokal’s example reveals a playbook worth studying.

Rather than freezing or waiting for the next Fed decision, they’re acting. They’re using their size to their advantage—not to overpower the market, but to outmaneuver it. That means embracing new products, new segments, and new capital structures that allow them to lead—not lag—the next cycle.

There’s still opportunity,” says Lantz. “You just have to be able to move when it shows up.”