Fident Capital secured $30.2MM of bridge financing for a ten-building, 140-unit multifamily project nearing completion in Carson City, Nevada. The Las Vegas-based borrower received fixed-rate, interest-only financing from a private lender in New York that closed prior to the project’s completion at 50% occupancy.

A dramatic rise in interest rates during the construction period without an interest rate cap in place depleted the projects’ interest reserve, requiring the borrower to pay interest out of pocket and motivating the need to refinance prior to completion. A looming construction loan maturity also put pressure on the capital raising and closing timeline.

Fident’s precise modeling of a late-construction refinance with overlapping completion and lease-up timelines ensured the appropriate sizing of both interest and operating reserves. Additionally, an in-the-money rate cap structure provided supplemental cash flow to maintain a positive debt coverage ratio for the lender. This ultimately enabled the incoming lender to capitalize a new interest reserve and closing costs with minimal cash input from the borrower.

Thorough market research compensated for the absence of institutional lease and sale comparables in the immediate area, helping to maximize the as-stabilized value amidst holiday season leasing concessions and prevailing market beliefs that significant cap rate expansion would impair the assets value. Furthermore, as the neighboring Reno market experienced a surge in new developments, highlighting the comparative advantages of residing in Nevada’s state capital became increasingly important.

Despite these obstacles, Fident Capital facilitated a competitive bidding process, achieving attractive financial terms for the client and overcoming lender reservations about the property’s staged completion and leverage.