Fident Capital secured a $6.4MM construction loan for the development of a 3-story, 20-unit multifamily project located in the Pacific Beach submarket of San Diego, California. A regional bank provided the 75% LTC, recourse, financing for a 3.75% rate with very low transaction costs.
The entitled, infill, project sits in Pacific Beach’s coastal zone, steps away from the beaches, and within walking distance to a wide array of parks, cafes, restaurants, bars, and unique retail that define the locale. The project’s 18 two-bedroom, dual-master, market-rate units and 2 affordable units brings much needed supply to a submarket that has been at sub-three-percent vacancy, for decades.
Challenges to the project included environmental remediation measures required to prevent contaminants of the prior carwash use from impacting future tenants. Additionally, due to pandemic related stressors, the City of San Diego’s development services department and SDG&E caused significant timing delays which prevented permit issuance before close of the financing. Finally, the strong local builder/developer was self-performing the general contracting function without a GMAX contract which put additional scrutiny upon the budget and their ability to contain costs.