Fident Capital secured a $17.0MM construction loan for the development of a 4-story, 49-unit multifamily project with 1,500 SF of ground-floor retail in La Mesa, CA. A private debt fund provided the non-recourse, 68.1% LTC loan with a 36-month initial term.
The project features a mix of one-bedroom and two-bedroom units, including four affordable units. Conveniently located within a mile of historic La Mesa Village, residents enjoy easy access to local dining, shops, and cafés, along with on-site amenities such as a fourth-floor rooftop terrace, BBQs, and fire pits.
Challenges for the project included rising treasury rates, which hit 4.7% in May 2024, heightening concerns about terminal cap rates and overall deal viability. Coupled with a narrow yield spread, this necessitated a robust defense of pro forma rents and efficient operating expenses to secure the desired loan proceeds.
Despite these hurdles, Fident Capital’s competitive process attracted multiple bids. By leveraging the sponsor’s track record of successful nearby projects and their strong LP investor who invested a year prior at the initial land acquisition, we strengthened the deal’s position. A comparative analysis of bank and private debt options ultimately led the borrower to opt for private financing, which offered higher leverage without requiring a depository relationship. Best-and-final negotiations secured a drop in lender fees and rate plus a $500K increase in loan proceeds culminating in a non-recourse loan at 68.1% LTC.