Thursday, February 26, 2026
Fident Capital arranges $47.9M construction loan for North Park multifamily project
Fident Capital arranged $47.9 million in construction financing for an eight-story, 125-unit multifamily project planned for North Park.
Fident Capital arranged $47.9 million in construction financing for an eight-story, 125-unit multifamily project planned for North Park, the company announced Jan. 15.
The San Diego-based developer secured a 36-month, non-recourse loan at 60 percent loan-to-cost. The structure includes a built-in bridge component that reduces the interest rate by 175 basis points and extends the loan to 48 months once the project reaches 25 percent occupancy.
The financing also allows 100 basis points of interest to accrue, lowering the required interest reserve and increasing net proceeds, which reduced the sponsor's equity contribution. The lender additionally agreed to waive the exit fee and minimum interest if the loan is refinanced through an affiliated permanent financing program.
Fident Capital's assignment required navigating shifting views among stakeholders on the project's ideal capital structure. Early discussions focused on maximizing leverage at 75% loan-to-cost, but once the deal went to market, participants weighed tradeoffs between higher proceeds, cost of capital and execution risk.
The developer's general contracting strategy also played a key role. Options included self-performing construction, obtaining a new general contractor (GC) license for a related entity or hiring a third-party contractor. Fident ultimately created a newly licensed GC entity and executed a guaranteed maximum price contract.
Despite the complexities, the project drew strong lender interest, supported by North Park's long-established appeal, walkability and steady demand for housing, according to Fident.
The selected lender demonstrated a deep understanding of both the sponsor's capabilities and the submarket's fundamentals. The financing's rate reduction during lease-up and its streamlined path to permanent debt were key factors in the final execution, Fident said.
The San Diego-based developer secured a 36-month, non-recourse loan at 60 percent loan-to-cost. The structure includes a built-in bridge component that reduces the interest rate by 175 basis points and extends the loan to 48 months once the project reaches 25 percent occupancy.
The financing also allows 100 basis points of interest to accrue, lowering the required interest reserve and increasing net proceeds, which reduced the sponsor's equity contribution. The lender additionally agreed to waive the exit fee and minimum interest if the loan is refinanced through an affiliated permanent financing program.
Fident Capital's assignment required navigating shifting views among stakeholders on the project's ideal capital structure. Early discussions focused on maximizing leverage at 75% loan-to-cost, but once the deal went to market, participants weighed tradeoffs between higher proceeds, cost of capital and execution risk.
The developer's general contracting strategy also played a key role. Options included self-performing construction, obtaining a new general contractor (GC) license for a related entity or hiring a third-party contractor. Fident ultimately created a newly licensed GC entity and executed a guaranteed maximum price contract.
Despite the complexities, the project drew strong lender interest, supported by North Park's long-established appeal, walkability and steady demand for housing, according to Fident.
The selected lender demonstrated a deep understanding of both the sponsor's capabilities and the submarket's fundamentals. The financing's rate reduction during lease-up and its streamlined path to permanent debt were key factors in the final execution, Fident said.
