Fident Capital facilitated the off-market sale and of a 126-unit multifamily development located in an Opportunity Zone within Carson City, Nevada. A developer-client engaged Fident to source construction financing and joint-venture equity for the proposed development. The onset of COVID changed the client’s financial picture dramatically. The partners most capable of securing the large construction loan required by the project held the majority of his portfolio in the hospitality space and saw a precipitous drop in cash flow. As such, they neither had the appetite, nor the capacity to sign the project’s required loan guarantees.
One of the private investment firms Fident initially pitched the equity deal to had expressed some interest in owning the site, rather than entering a JV. With our client unable to borrow, the lemonade from lemons solution was to propose a sale to our client.
The transaction closed, and the acquiring builder/developer retained Fident for the downstream capital raise.
Walking distance from downtown Carson City, the location offers tenants immediate access to the core amenities, employment centers and schools, within this state capitol. Lake Tahoe (and a slew of Sierra Nevada amenities), fall just a 20-minute drive west; Reno is just 30 minutes north. The project offers the market a Class-A, garden-style, walk-up complex with one-and two-bedroom units.
Challenges to the project included the tertiary nature of the location and a lack of direct comparable product in the immediate area given the dated nature of the surrounding inventory. The re-marketing of the deal also proved challenging given the general COVID-induced uncertainty that significantly impacted the construction lending options available for a non-recourse request. Fortunately, pandemic-induced demographic shifts further exacerbated Carson City’s decades-long undersupply of housing stock, a condition that was easily validated by third-party market research.
This truly off-market transaction allowed our client to profitably sell the development to a sophisticated buyer who could see the opportunity (which countless others had missed) and it brought the buyer a deal they may not have been able to source through conventional means.