Fident Capital secured an $18.8MM non-recourse bridge loan at certificate of occupancy for Ollie, a recently completed 44-unit multifamily project in the North Park neighborhood of San Diego. The financing, at 87%LTC/75%LTV, repaid high-leverage construction debt, dropped the cost of financing, and provides time for the property to stabilize for refinance or sale. The borrower, a repeat Fident client, is an experienced owner-developer who has entitled, built, and sold several residential and multifamily projects throughout San Diego. The lender is an east coast-based private debt fund looking to establish a strong West Coast presence.
Delays to the original closing timeline proved challenging, caused by chronic construction labor shortages, supply chain disruptions, and permitting and inspection backlogs at the city. Fident assisted with the management of third-party reports and consultants to keep the loan closing on track, allowing the borrowers to focus their full effort on wrapping up construction. Simultaneous project completion and loan closing meant that subcontractor retention and post-completion items represented a high-dollar line item to be capitalized by the new financing, which warranted special attention when raising capital. Fident fielded all questions pertaining to the project budget and provided considerable market research to help justify pro forma rents while the project started pre-leasing.
Other challenge to the project included the non-recourse mandate while the project was at 0% occupancy, which limited the competitive lender pool. Additionally, the borrower sought maximum loan proceeds with a minimal prepayment.
Despite the hurdles the project faced, Fident (armed with project-specific knowledge from having placed the original development capital) successfully marketed the borrower’s deep expertise in construction management and cost control, along with the favorable demographics of the rapidly gentrifying North Park submarket, to procure multiple bids for the bridge financing and to arrive at the most advantageous terms possible for our client.