Fident Capital secured a $17.6MM bridge loan for a 50-unit multifamily development in San Diego’s Carmel Mountain Ranch neighborhood. This repeat client, an established San Diego-based developer specializing in infill multifamily projects, sought more cost-effective capital to bridge the nearly complete project through lease-up and stabilization until an eventual sale. A New York-based private lender provided a cash-neutral refinance of the construction loan sized to 72.5% LTV and 7.50% debt yield, closing expeditiously just before the construction lender’s maturity.
The development showcases innovative urban infill execution, with four residential stories constructed above an existing two-story parking podium. The project delivers 30 one-bedroom and 20 two-bedroom units, including 15 affordable units at various AMI thresholds, while featuring premium amenities such as dedicated co-working space and two amenity decks. Located in an affluent suburb with superior school districts and strong employment drivers anchored by the tech and defense contracting industries, the property exemplifies the sponsor’s strategy of delivering compelling residential products in supply-constrained submarkets.
Sizing loan proceeds at a sub-8% debt yield while closing before TCO with $4.0MM in remaining construction draws demanded specialized attention. Fident’s detailed comparative analysis of similarly efficient assets successfully validated aggressive pro forma rents and a 25% expense ratio, supporting the desired proceeds. Additionally, Fident provided critical analysis to help the Limited Partner evaluate whether to bridge out of the construction loan or extend with the existing lender. A thorough cost-benefit analysis demonstrated the advantages of refinancing, ultimately securing LP support for this strategy.
Despite the complex nature of a pre-TCO closing, Fident secured multiple term sheets from lenders actively seeking this type of situation, with five highly-competitive finalists emerging. The sponsor’s proven track record provided critical comfort for the pre-TCO closing requirements. Final negotiations yielded material improvements including $100k in additional proceeds, a 10bps rate reduction, 25bps lower first extension fee, and a 50bps lower rate floor, closing at SOFR +365.
