Fident Capital secured $10.8MM of permanent financing for Sea+Stone, a 20-unit multifamily complex with 4,600 SF of ground floor medical office in La Jolla, California. The borrower is a vertically integrated local development firm with over 15 years of experience in the San Diego market and a strong track record of award-winning projects. The lender, a Tampa-headquartered institutional investment manager with over $100 billion in AUM, provided 7-year fixed-rate financing at 65% LTV, priced at 190 basis points over the 7-year Treasury with no origination fees.
The sponsor acquired the 1980’s vintage property, located in the heart of La Jolla Village, in 2022 and completed a full office-to-residential conversion in late 2024. The redevelopment delivered modern, high-end residences while retaining the long-standing dental practice on the ground floor. Now stabilized, the project serves as a leading example of adaptive reuse in San Diego, with its exceptional location just 0.5 miles from the beach.
Primary financing challenges stemmed from the boutique, high-end nature of the asset, with mostly small floorplans commanding higher rents than those associated with the older inventory in the market. The mixed-use nature of the asset presented an additional underwriting challenge, with 31% of the property’s net rentable area comprising of commercial space, generating 24% of NOI.
On the valuation front, Fident leveraged its understanding of the La Jolla Village submarket, emphasizing the area’s notoriously restrictive development environment – including a 30-foot height limit and Coastal Commission oversight. These regulatory barriers have constrained multifamily deliveries to fewer than 100 units over the past decade, insulating the property’s long-term value and supporting strong demand fundamentals.
To address the mixed-use underwriting challenge, Fident segmented the residential and commercial components, demonstrating that the multifamily portion alone supported a per-unit value of $750K to $800k per unit.
The property attracted significant lender interest. When entity structuring requirements emerged during closing, Fident negotiated rate concessions to offset the associated costs and tax implications, ensuring the transaction remained economically viable for the sponsor.
