Fident Capital secured $48.0MM (78.6% LTC) of construction financing for an 8-story, 114-unit multifamily development in the Golden Hill submarket of San Diego, CA. The borrower, a vertically integrated local development team, received non-recourse financing from a New York-based debt fund featuring competitive pricing at SOFR +500, with a 30-month term and two extension options.
The project is one of the first mid-rises to break ground in San Diego’s Golden Hill submarket, a historic neighborhood now emerging as one of the city’s most promising up-and-coming areas. Situated at a prime corner at the apex of Golden Hill, the development features a sophisticated design with Type-1 concrete construction, floor-to-ceiling windows, automated parking stackers, and a rooftop pool offering sweeping views of Downtown and San Diego Bay. As a high-profile development on one of Golden Hill’s best sites, the project is poised to be a catalyst in Golden Hill’s continued revitalization—elevating it to the level of neighboring submarkets like North Park and Bankers Hill as institutional capital and infill investment accelerate.
A primary challenge was validating pro forma revenue assumptions in an unproven submarket lacking direct comps. Fident conducted rigorous market research, triangulating upscale Balboa Park-adjacent neighborhoods such as Bankers Hill, North Park, Little Italy, and Hillcrest. This analysis supported an average market rent of $5.21/SF—more in line with these higher-value submarkets than with nearby East Village or neighborhoods south of Highway 94. Furthermore, Fident compiled detailed mapping of homeless population data, providing compelling evidence for lenders to discount neighboring East Village comps and instead focus on the more relevant northern neighborhoods surrounding Balboa Park. Fident also substantiated a projected valuation of approximately $740,000 per unit, far exceeding East Village comps in the $400,000–$500,000 range.
Structuring the capital stack to achieve the desired leverage proved to be the most complex challenge. Fident successfully convinced the lender to recognize both a $1.5MM land lift and $2.9MM in deferred developer and GC fees as contributed equity within the project’s sources and uses, allowing the borrower to limit cash equity to just $8.9MM. This approach was critical—without the creative recognition of both land appreciation and fee deferrals as equity contributions, effective leverage would have approached 85% LTC, a threshold above which no lender would offer competitive terms. Fident supported the land valuation by documenting recent acquisitions by institutional developers in the immediate vicinity, demonstrating that comparable sites were trading at $350-400 per SF compared to the borrower’s $250 per SF basis from their 2021 purchase.
Facing a potential appraisal shortfall that threatened the deal, Fident developed a comprehensive 30-page defense that preserved millions in loan proceeds. Not only did this salvage the transaction, but the sponsor has already leveraged this success to secure an $11MM common equity investment from the same capital provider for their next development.
