Fident Capital secured $16.5MM of joint venture equity and $35.3M of construction financing for the development of 99 units across three separate parcels. The San Diego-based sponsor has completed over 1,500 residential units across 23 projects over the past two decades. Fident sourced the equity from a close, long-standing capital relationship with Canadian roots. They provided 93% of the project’s equity and closed on the site acquisition, during the pre-development phase of the project.
 
A private lender provided the construction debt, structured as three separate loans that closed as each parcel became shovel ready. The loans feature a compelling mini-perm option, allowing for significant interest savings of approximately 300-400 basis points once the project receives certificate of occupancy, providing a competitive edge over competing bank options. 
 
Presenting the entire, larger deal as something of a “3-in-1 package” increased the borrower’s financing options available and the upfront equity commitment gave the developer a “full tank of gas” at acquisition and the ability to focus on approvals and debt financing after the land close.
 
Challenges included the need to secure a committed equity partner months in advance of final project approvals and budget finalization within 45-days of Fident’s engagement due to an approaching land purchase deadline. Environmental concerns were also significant, as two of the three parcels were former gas stations, requiring significant diligence to identify responsible parties and formulate mitigation plans.
 
Precise modeling and management of what were essentially three distinct closing processes was required due to the separate timelines, budgets, and insurance requirements for each parcel. In addition, managing the equity partner’s expectations regarding the cost of debt financing in a volatile interest rate environment was critical, leading to the decision to pivot to a private lender.
 
Despite the complexity, Fident Capital sourced a variety of capital stack solutions and negotiated an additional $3.3MM in loan proceeds during an extended closing to optimize the client’s equity commitment.