Kevin Choquette

Fident Capital secured a full capital stack comprised of a $9.8MM construction loan and $4.0MM of joint venture equity for the development of a 4-story, 43-unit multifamily project in one of San Diego’s fastest growing cities, Chula Vista. A local bank provided the construction financing and a private investment firm provided the equity.

The project will offer the community a mix of mostly one-bedrooms with a few studios, two-bedroom, and three-bedrooms units. The project sits one-half… Show more

Fident Capital secured a full capital stack comprised of a $9.8MM construction loan and $4.0MM of joint venture equity for the development of a 4-story, 43-unit multifamily project in one of San Diego’s fastest growing cities, Chula Vista. A local bank provided the construction financing and a private investment firm provided the equity.

The project will offer the community a mix of mostly one-bedrooms with a few studios, two-bedroom, and three-bedrooms units. The project sits one-half of a block away from the blossoming downtown village corridor of 3rd avenue and offers renters a pedestrian-friendly environment filled with restaurants, breweries, shops and services. With dated product dominating this submarket, this infill development will be met with high demand and limited competition.

Fident engaged with the developer early on and played a vital role in negotiating the off-market acquisition from another client. Fident remained involved throughout the City’s approval process, updating financial models and helping vet construction costs before embarking on the capital raise. The City’s 10-year deferment of 100% of its impact fees, provided an additional, very low cost, layer of financing that help bring the project to full capitalization.

Challenges to the project included communicating the financial impact of the unique fee deferral method to investors, a lack of direct comparable new projects in the immediate area and negotiating a custom equity structure that resulted in a minimal sponsor co-invest. Additionally, late-stage construction cost increases motivated the sponsorship to switch lenders mid-closing in order to preserve equity returns. Fident championed the analysis of cost-savings associated with the change and assisted with the coordination of transactional documents to keep equity at the table during that turbulent time. Show less

Fident Capital secured a $5.9MM loan for the acquisition and renovation of a multi-tenant office complex located in one of San Diego’s strongest office submarkets: Sorrento Mesa. A national private debt fund provided the loan with holdbacks for capital improvements, tenant improvements, and leasing costs.

The two building, two-story, asset is well located and leased by local businesses. The borrower plans to make modest improvements to lift rents closer to market while approaching… Show more

Fident Capital secured a $5.9MM loan for the acquisition and renovation of a multi-tenant office complex located in one of San Diego’s strongest office submarkets: Sorrento Mesa. A national private debt fund provided the loan with holdbacks for capital improvements, tenant improvements, and leasing costs.

The two building, two-story, asset is well located and leased by local businesses. The borrower plans to make modest improvements to lift rents closer to market while approaching staggered lease roll-over with a blend and extend approach.

The client sourced the transaction off-market and engaged with Fident for an initial underwriting support while negotiating price. With a favorable basis and below-market in-place rents and low vacancy, potential lenders needed to understand the business plan; an underwrite focused solely upon the stabilized asset would come up short on desired loan proceeds. Fident procured a lender that understood the forecasted rent lift and structured a deal that funded improvements and allowed enough free cash flow so that the borrower could earn a current return on their investment.

Challenges included the diverse tenant mix that occupied just 1,700 SF per tenant, the need for non-recourse, an insurance policy expiring just prior to closing, and modifying lender control language to accommodate the borrower’s in-house property management agreements. Show less

Fident Capital secured a $5.3MM loan for the refinance and improvement of a multi-tenant neighborhood retail center in the historic core of Poway, California. A regional Bank provided the financing that returned a significant portion of the borrower’s initial equity investment and funded all future cost of renovation at a fixed rate of 4.8% with an open prepay.

The asset sits on “main-street” in the heart of the community and final touches to the borrower’s deep renovations were needed… Show more

Fident Capital secured a $5.3MM loan for the refinance and improvement of a multi-tenant neighborhood retail center in the historic core of Poway, California. A regional Bank provided the financing that returned a significant portion of the borrower’s initial equity investment and funded all future cost of renovation at a fixed rate of 4.8% with an open prepay.

The asset sits on “main-street” in the heart of the community and final touches to the borrower’s deep renovations were needed to return the center to its original charm. The experienced local borrower will add 7,000 SF to the existing 28,000 SF center by completing a build-to-suit project for a local brewery, expanding several patio spaces for existing tenants and performing other façade improvements.

Challenges to the project included the scope of a build-to-suit which involved the immediate construction of a new structure, a lack of credit in the local mom-and-pop tenant mix, a number of freshly minted leases that enjoyed free rent for their first 6 months, and the need for non-recourse financing given borrowers ownership structure.

Fident procured a lender that understood the borrower’s business plan, the strength of the location, the dramatic value-add that had taken place, as well as the impact of the borrower’s “finishing touches.”. The negotiated loan provided $800k of future funding, a swap execution to fix the rate, and an interest only term with zero prepayment penalty to allow the borrower flexibility on the exit. Show less

Fident Capital secured a $15.75MM construction loan for the development of a 6-story, 44-unit multifamily project located in San Diego’s burgeoning North Park neighborhood. A private debt fund provided the loan at approximately 80% LTC, closing as-advertised within the term sheet.

The project will offer the community a mix of one-bedroom and two-bedroom units, including five affordable units. The project rates as an ideal infill play with high supply-constraints, limited competition… Show more

Fident Capital secured a $15.75MM construction loan for the development of a 6-story, 44-unit multifamily project located in San Diego’s burgeoning North Park neighborhood. A private debt fund provided the loan at approximately 80% LTC, closing as-advertised within the term sheet.

The project will offer the community a mix of one-bedroom and two-bedroom units, including five affordable units. The project rates as an ideal infill play with high supply-constraints, limited competition, high rents, and a locale that offers tenants a rich array of area amenities in the form of bars, restaurants, coffee houses, and boutique shops, within a pedestrian-friendly environment.

The client sourced the transaction off-market and engaged Fident early to assist with the feasibility analysis. Fident remained involved throughout the City’s approval process, updating financial models, and helping vet construction costs before embarking on the capital raise.

Challenges to the project included getting the lender to recognize the land owner’s equity in the deal as they became a part of the development venture, and keeping the lender engaged with the project as the close was halted to allow the developer to resolve last-minute City concerns relating to the historical nature of the existing structures. Eventually, all agreed to a soft close that allowed the developer to resolve the issue before making a draw and putting a shovel in the ground. Show less

Fident Capital secured joint venture equity and a builder/developer partner for a fully entitled 43-unit multifamily project in Chula Vista, CA. Our developer-client engaged Fident on two possible executions; either raise JV-equity to allow the completion of design-development and groundbreaking to follow in approximately 6 months, or find another builder to bring most of the equity to the venture and execute the development while affording our client a passive position. Given the dramatic… Show more

Fident Capital secured joint venture equity and a builder/developer partner for a fully entitled 43-unit multifamily project in Chula Vista, CA. Our developer-client engaged Fident on two possible executions; either raise JV-equity to allow the completion of design-development and groundbreaking to follow in approximately 6 months, or find another builder to bring most of the equity to the venture and execute the development while affording our client a passive position. Given the dramatic increase in the site’s post-entitlement value, the formation of a venture with another builder/developer proved the most attractive. Our client pulled equity off the table and retained an attractive L.P. role in the go-forward venture.

The Third Avenue Village location, an infill parking lot, lines up very well for redevelopment. The proposed four-story, surfaced parked, and elevator-served project will deliver high-quality product into a market with sub 2% vacancy and virtually zero incoming supply. Further, due to its location within the City’s redevelopment zone, the project secured a material deferral of impact fees which significantly improved economics.

This transaction came with a unique set of challenges. The business required the sale of entities and of fee title, unique timing of each of those transactions across two separate escrow companies, a complex flow of funds, and substantial rigor regarding the collateral, security agreements, and promissory notes which tied these escrows together. In the interest of brevity, we can’t explore all of these dimensions, but, all participants were pleased with the outcome in terms of price, leverage, tax implications, and legal exposure once the dust settled.

This truly off-market transaction allowed our client to capture an excellent step-up and a carried interest and it brought the builder/developer partner a deal they may not have been able to source through conventional means. Show less

Fident Capital secured $12.4MM of construction debt and joint venture equity for the development of a 3-story, 682-unit self-storage project in the Portland, OR suburb of Happy Valley. The 77,000 square foot project employed $7.6MM of construction debt sourced from a regional bank and $3.8MM of equity from a mid-sized California-based opportunity fund.

The development is located in one of the few industrial zones within the municipality adjacent to a major highway with excellent drive-by… Show more

Fident Capital secured $12.4MM of construction debt and joint venture equity for the development of a 3-story, 682-unit self-storage project in the Portland, OR suburb of Happy Valley. The 77,000 square foot project employed $7.6MM of construction debt sourced from a regional bank and $3.8MM of equity from a mid-sized California-based opportunity fund.

The development is located in one of the few industrial zones within the municipality adjacent to a major highway with excellent drive-by visibility and traffic counts. The project will serve a quickly growing bedroom community in Southeast Portland that is underserved in terms of square feet of storage per capita.

Our Southern California based client had diligently pursued expansion in the Portland market for years and only after having the discipline to pass on three other opportunities which Fident had helped evaluate did they find the appropriate deal. Fident’s assistance with the underwriting of the possible sites facilitated the client’s successful brand expansion into Oregon.

Challenges to the project included overcoming the macro-perception that Portland has been over-served with self-storage, pursuing investment capital prior to the final design approvals from the City, and convincing equity that the developer had the skill to self-manage the facility under their own flag. Show less

Fident Capital secured the full capital stack comprised of a $14.4MM construction loan and $6.2MM of joint venture equity for the development of a 16-unit luxury condo project in the Bankers Hill neighborhood of San Diego, CA. A regional bank provided the construction loan and an institutional private equity group provided the equity.

Located within walking distance to Balboa Park, and in close proximity to local thoroughfares, this site straddles a city block and boasts views of both… Show more

Fident Capital secured the full capital stack comprised of a $14.4MM construction loan and $6.2MM of joint venture equity for the development of a 16-unit luxury condo project in the Bankers Hill neighborhood of San Diego, CA. A regional bank provided the construction loan and an institutional private equity group provided the equity.

Located within walking distance to Balboa Park, and in close proximity to local thoroughfares, this site straddles a city block and boasts views of both the San Diego skyline and harbor. The 5-story build was designed by famous architects Safdie Rabines and provides a unique boutique product for the local luxury condo. Units offer 2 to 3 bedrooms, 2 to 4 baths, and surface level and sub-terrain parking garage outfitted with mechanical lifts. Projected pricing for the project ranges from the low $1.0MMs to $2.0MM+.

Despite the project’s incredible location, the project presented challenges. This transaction represented a significant scaling up from the client’s previous experience and in a market that was seeing a good amount of new competitive supply. An attractive land basis, diligent underwriting, and our client’s willingness to contribute significant equity were imperative to the project’s successful financing.

Supporting the pricing of these units was also critical. Fident and a third-party researcher worked tirelessly to demonstrate pricing, benefiting from a plethora of competitive nearby sales.

A regional bank provided leverage up to a true 65% LTC, derived from 60% LTC with an elevated land basis, but had not financed a joint venture with an institutional equity source. On the equity side, through intensely iterative stress testing, Fident was able to negotiate a hybrid participating pref joint venture waterfall structure that was accretive to both parties. Additionally, Fident’s ability to mediate the negotiation of project management responsibilities, org structuring, and guarantees, lead to a successful close. Show less

Fident Capital secured $9.5MM of permanent financing for a multi-tenant office building in Riverside, California. Known as the Spruce Street Professional Center, the five-story, 77,841 square foot “Class A” office building sits on a 2.81-acre site. Originally constructed in 2007, a mix of local and national tenants occupy the steel and glass mid-rise. Working with one of the largest finance companies in the world, Fident’s CMBS execution funded at 75% LTV, an 8% debt yield, and a 1.25 debt… Show more

Fident Capital secured $9.5MM of permanent financing for a multi-tenant office building in Riverside, California. Known as the Spruce Street Professional Center, the five-story, 77,841 square foot “Class A” office building sits on a 2.81-acre site. Originally constructed in 2007, a mix of local and national tenants occupy the steel and glass mid-rise. Working with one of the largest finance companies in the world, Fident’s CMBS execution funded at 75% LTV, an 8% debt yield, and a 1.25 debt coverage ratio on a 30-year amortization. Proceeds from the fixed-rate, 10-year loan on a 30-year amortization repaid the 2007 vintage term-loan that was maturing.

The diverse tenant mix, 87% occupancy, and attractive loan basis of $122/SF were more than sufficient to entice several lenders to support this financing. However, the main challenge to the deal was the fact that the previous term loan was secured in the 2007 era, when the Riverside market offered higher office rents, higher occupancy levels, and stronger values. As such, the in-place mortgage was larger than the current cash flow would support. Therefore, the main focus of the financing was to secure maximum proceeds.

Two paths revealed themselves. Path one was to take a short-term bridge to bring the property into truly optimal performance by getting closer to 100% occupancy and optimizing NOI for a more perfect term loan. While that path held promise of the highest proceeds, it was more risky, as the takeout was contingent upon future leasing and the then-in-place interest rates’ impact on forward loan proceeds. Furthermore, while this would be I.O. debt, it had a variable rate. The alternative path was to lock in the fixed-rate financing the market could offer now, and minimize the amount the borrower would need to provide out of pocket to balance the new loan and the pay-off amount. Fident provided both loan options and the latter path was the path chosen.
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Fident Capital secured $9.5MM of permanent financing for the recently constructed California Department of Motor Vehicles (DMV) located in Lancaster, California. The 5.8-acre site holds a 28,878 square foot built-to- suit office building fully leased to the State of California on a 20-year lease. Working with one of the largest finance companies in the world, Fident’s CMBS execution funded at 70% LTV and 90% LTC which repaid the existing construction loan and provided
considerable cash out… Show more

Fident Capital secured $9.5MM of permanent financing for the recently constructed California Department of Motor Vehicles (DMV) located in Lancaster, California. The 5.8-acre site holds a 28,878 square foot built-to- suit office building fully leased to the State of California on a 20-year lease. Working with one of the largest finance companies in the world, Fident’s CMBS execution funded at 70% LTV and 90% LTC which repaid the existing construction loan and provided
considerable cash out to the borrower on a 10-year, fixed rate, loan term.

The advantageous long-term lease and credit tenant were not enough to mitigate all challenges of the deal. The main obstacle proved to be securing sufficient loan proceeds. All California State leases provide for outs beyond years 8 to 10. While this may be good for the State, it forces risk capital and lenders to underwrite the short (in this case) 10-year initial term rather than the entire lease. Further, while the negotiated lease rates were on par with other California DMVs and made sense given project costs and the initial lease term for this purpose-built asset, the tertiary market location provided no evidence of supportive comparable lease rates.

Our client, after a recent struggle with appraisal issues from a long-standing bank relationship, engaged Fident to mitigate these challenges. Our careful and statewide analysis of other DMV and GSA leased properties as a careful and deliberate choice of lending partner, led to a strong appraisal and optimal proceeds. While numerous CMBS providers quoted the deal, Fident tapped our nationwide network of finance professionals to further vet potential lenders’ ability to execute. Proving invaluable, this network reinforced our choice of lending partner who went on to close at the agreed upon loan amount without re-trading any of the original deal terms. Show less

Fident Capital secured $2.87MM of joint venture equity for the acquisition, entitlement, and development of a 21-unit residential townhome project in the desirable Bankers Hill area of San Diego, California. A San Diego-based private equity group, focused primarily on opportunistic residential projects, provided the equity funding. This equity investment balances the capital stack with a $9.2MM construction loan provided by a Southern California bank providing 75% loan to cost.

Located… Show more

Fident Capital secured $2.87MM of joint venture equity for the acquisition, entitlement, and development of a 21-unit residential townhome project in the desirable Bankers Hill area of San Diego, California. A San Diego-based private equity group, focused primarily on opportunistic residential projects, provided the equity funding. This equity investment balances the capital stack with a $9.2MM construction loan provided by a Southern California bank providing 75% loan to cost.

Located in an excellent infill location directly across from Balboa Park, this infill site encompasses one half of a city block and boasts views of both the San Diego skyline and the harbor. Units offer 2 bedrooms plus a den and 2.5 baths along with 2-car garages in either 3 or 4 story options. Most units feature roof top decks with panoramic views. Averaging around 1,500 square feet, projected pricing for the project ranges from the low $600s to mid $800s.

Despite the project’s incredible location, the site is directly underneath the flight path of San Diego International Airport; a significant negative that many Bankers Hill residents must reconcile. Fident, along with a third-party research provider, worked tirelessly to demonstrate supportive pricing. Fident pointed to developers that have offered similar product with pricing that reflects the flight path impact and found considerable success over the last 2 decades. Furthermore, much of the newer product coming online will price over $1MM, and in some cases at $1,000 per square foot, making the project comparatively affordable. Lastly, Fident illuminated that given the caliber of the Sponsor’s construction, the noise impact inside units register very low decibel levels from the overhead flights.
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Fident Capital secured $7.1MM of joint venture equity for the construction of a 97-unit garden style multifamily project in Chula Vista, California. Equity financing, funded through an Austin-based correspondent to a prominent New York hedge fund, stands alongside the Sponsor’s co-invest and a $15.4MM non-recourse construction loan provided by a national banking source (65% LTC). The 5-acre site sits within the West Chula Vista corridor, a submarket of the larger San Diego south bay… Show more

Fident Capital secured $7.1MM of joint venture equity for the construction of a 97-unit garden style multifamily project in Chula Vista, California. Equity financing, funded through an Austin-based correspondent to a prominent New York hedge fund, stands alongside the Sponsor’s co-invest and a $15.4MM non-recourse construction loan provided by a national banking source (65% LTC). The 5-acre site sits within the West Chula Vista corridor, a submarket of the larger San Diego south bay area.

This infill, raw land, is perfectly suited for the development. The Sponsor can be described as a “first mover” in what may well become a popular redevelopment area in San Diego County. The Sponsor’s off-market acquisition and entitlement efforts cut through a lot of misunderstanding about the nature of opportunity in this market and will deliver high-quality product into a market with sub 2% vacancy and virtually zero incoming supply. Further, located within a redevelopment zone for the City, the project secured deferral of a material portion of its impact fees and will enjoy significant public right of way improvements that further catalyze development in the area. Convenient freeway access and proximity to urban employment centers position the project as a premier workforce housing option.

The joint venture equity partner, with whom Fident has enjoyed a long relationship, provided the required equity. After a preferred return, profits from the project are split 50/50; the equity partner does, however, enjoy a lookback to correct the profit distributions if their performance drops below a certain threshold. Flexible in their capital allocations, this limited partner seeks investments ranging from $5MM to as large as $50MM. While multifamily is a core focus of the fund, other attractive property types include grocery-anchored retail, office, industrial, residential condos, secondary market malls, and mixed-use assets. Show less

Fident Capital successfully capitalized the $8MM acquisition and renovation of a 29,000 SF office building in Chula Vista, California. The $1.5MM of Joint Venture Equity and $5.6MM of Bridge Debt supported the repositioning of the long-impaired asset to medical office.

This uniquely sourced REO fell victim to the troubles of the Great Recession. Litigation around the project and the associated lis pendens effectively chilled would-be buyers, and the bank’s reluctance to improve cold… Show more

Fident Capital successfully capitalized the $8MM acquisition and renovation of a 29,000 SF office building in Chula Vista, California. The $1.5MM of Joint Venture Equity and $5.6MM of Bridge Debt supported the repositioning of the long-impaired asset to medical office.

This uniquely sourced REO fell victim to the troubles of the Great Recession. Litigation around the project and the associated lis pendens effectively chilled would-be buyers, and the bank’s reluctance to improve cold shell space and pay leasing commissions meant that high vacancy from the point of foreclosure remained during several years of market recovery.

The previous owner acquired the asset with aggressive value-add plan. Significant renovations to major systems from that time were a major plus. Still, with over 60% of the property vacant and more than half of that cold shell, the sponsor was able to secure a price at approximately $2.5MM below the former owner’s peak investment. With limited deferred maintenance, the Sponsor plans light common area upgrades and cold shell improvements to reposition the asset as a professional medical office.

Fident engaged a trusted private finance company to close the debt side quickly. On the equity side, we partnered with an East Coast opportunity fund targeting smaller investments. Their 30-year track record with heavy value-add projects proved an ideal fit. Fident negotiated an 80/20 co-invest structure with a 3-tier waterfall providing the sponsor increasing promotes after clearing an initial 12% preferred return for all capital. The equity partner’s underwritten returns exceed a 25% IRR.
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Fident Capital secured the full capital stack for the acquisition and development of an 84-unit T.O.D. multifamily project in the Lemon Grove area of San Diego, CA. A local family office provided $4MM of joint venture equity and a regional bank provided a $13.8MM non-recourse construction loan at 75% LTC. The project, located near the freeway and a trolley station, contains mostly of one and two bedroom units and will target younger professionals and small families.

The Sponsor’s… Show more

Fident Capital secured the full capital stack for the acquisition and development of an 84-unit T.O.D. multifamily project in the Lemon Grove area of San Diego, CA. A local family office provided $4MM of joint venture equity and a regional bank provided a $13.8MM non-recourse construction loan at 75% LTC. The project, located near the freeway and a trolley station, contains mostly of one and two bedroom units and will target younger professionals and small families.

The Sponsor’s opportunistic buy generated an exceptionally low land basis per unit which allows for an elevator served 3 over concrete podium construction in an area with relatively lower rents.

The equity partner funded as senior equity with only a modest hurdle before a 50/50 profit split. Construction financing priced at 4.50% with a 1% origination fee. The bank required no personal guarantee, only a completion guarantee and standard carve outs.
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Fident Capital secured $9.7MM of debt and equity financing for a 23-unit single-family development in Chula Vista. A Southern California private equity group primarily focused on residential opportunities provided joint venture equity. Their $3.6MM investment balanced a $6.1MM construction loan provided by a local San Diego bank who provided 60% of the project’s cost.

The infill development features great views of the area and distant ocean views. Homes average about 1,800 square… Show more

Fident Capital secured $9.7MM of debt and equity financing for a 23-unit single-family development in Chula Vista. A Southern California private equity group primarily focused on residential opportunities provided joint venture equity. Their $3.6MM investment balanced a $6.1MM construction loan provided by a local San Diego bank who provided 60% of the project’s cost.

The infill development features great views of the area and distant ocean views. Homes average about 1,800 square feet with both 4 and 5 bedroom floor plans and price competitively at $275 per square foot.

Construction financing priced at a 4.50% rate with a 1% origination fee. The joint venture equity provided for a 90/10 co-invest and a 2-tier waterfall which opened up to 50/50 split in the final tier. With a timeline of less than 18 months, the pro forma generates over a 25% project IRR. Show less

Fident Capital secured a $14MM joint venture equity partner and fully capitalized the acquisition, entitlement, and development of a 129-unit multifamily project in downtown San Diego’s Little Italy. This submarket boasts very strong performance with rents, occupancy, and exit cap rates all at peak levels. The 129 units sit above 8,000 square feet of retail podium space and 2.5 levels of subterranean parking. The site represents an exceptional infill location sitting only 3 blocks from the… Show more

Fident Capital secured a $14MM joint venture equity partner and fully capitalized the acquisition, entitlement, and development of a 129-unit multifamily project in downtown San Diego’s Little Italy. This submarket boasts very strong performance with rents, occupancy, and exit cap rates all at peak levels. The 129 units sit above 8,000 square feet of retail podium space and 2.5 levels of subterranean parking. The site represents an exceptional infill location sitting only 3 blocks from the harbor.

The project offered an array of challenges to funding. The negotiated purchase and sale agreement contemplated a close before entitlement. However, the equity investor could not accept entitlement risk. Instead, Fident and the Sponsor restructured the purchase agreement to allow periodic deposits and a close upon entitlement.

Additionally, during the due diligence and entitlement period, changes to the FAA regulations allowed for an increase from 106 to 129 units. The increase added a level of subterranean parking and an additional floor; both of which materially changed costs and consequently equity requirements requiring the restructuring of the joint venture agreement. While the particulars on the negotiated terms must be kept confidential, the outcome Fident secured was very advantageous to the Sponsor. Show less

Fident Capital secured $8MM of Bridge Financing for a partnership buyout and repositioning of a 46,154 square foot hard corner retail center plus an adjacent 7-unit multifamily complex in the heart of Chula Vista, California. Family-owned for 70 years, disagreements over management and control of the asset led to a partition action. Internal strife and litigation froze all activity on the property, and the resulting 66% vacancy severely impacted cash flow.

Fident understood how this… Show more

Fident Capital secured $8MM of Bridge Financing for a partnership buyout and repositioning of a 46,154 square foot hard corner retail center plus an adjacent 7-unit multifamily complex in the heart of Chula Vista, California. Family-owned for 70 years, disagreements over management and control of the asset led to a partition action. Internal strife and litigation froze all activity on the property, and the resulting 66% vacancy severely impacted cash flow.

Fident understood how this under-performing property could quickly return to stabilized operations once the handcuffs of litigation were removed. Fident, illuminated this tremendous opportunity and secure bridge loan proceeds sufficient to some owners to buy all other T.I.C. interests.

With only two paying tenants, establishing value was the biggest hurdle. A cap rate valuation on in-place NOI didn’t come close. Fident worked closely with a strong local brokerage team to substantiate forward rental rates based upon a strong tenant mix. This work, coupled with real-time lender feedback on new lease interest allowed the property’s stabilized value to become readily apparent. Show less

Fident Capital secured $7.5MM of J.V. Equity for acquisition and entitlement of a 25-acre site in Murrieta, CA. The undeveloped site rests in an excellent location in the Golden Triangle and enjoys benefits of a newly formed Transit Oriented District (T.O.D.) overlay. The opportunistic acquisition of these 2 REOs captured the value derived through the recently formed T.O.D. prior the market fully assimilating the information. The Sponsor plans to entitle the asset for approximately 550… Show more

Fident Capital secured $7.5MM of J.V. Equity for acquisition and entitlement of a 25-acre site in Murrieta, CA. The undeveloped site rests in an excellent location in the Golden Triangle and enjoys benefits of a newly formed Transit Oriented District (T.O.D.) overlay. The opportunistic acquisition of these 2 REOs captured the value derived through the recently formed T.O.D. prior the market fully assimilating the information. The Sponsor plans to entitle the asset for approximately 550 multifamily units within 12 months.

Fident Capital identified a strategic equity partner focused on land entitlement and development. The private fund uniquely matched the project, especially considering their considerable experience in the Inland Empire. The fund possesses a 40 year track record, investing in more than $1.25B of land opportunities. The fund supplied 100% of the required equity. The Sponsor earned market rate management fees and a very advantageous profit participation.

The project held numerous challenges. Principally, the venture structure wherein the investor actually owns the asset. The fund, backed by university endowments targets long investment and always takes fee title in their deals. The developer’s protection comes through a recorded development management agreement.

An additional hurdle was determining the optimal product mix. Fident and the Sponsor analyzed and underwrote several product types including apartments, for-sale townhomes and condos to illuminate the optimal product configuration. After significant modeling, organic research, and collaboration with 3rd party experts, the Sponsor selected a two-phase, all 3-story, multifamily project.

Lastly, understanding T.O.D.’s proved crucial to funding. The City of Murrieta amended their General Plan effectively changing the zoning from Office to MF-3, requiring high density residential. Fident illuminated these changes to allay equity’s concerns over typical California entitlements.

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Fident Capital secured $24MM of project financing for the acquisition, entitlement, and development of an 18 townhome project in La Jolla, California. The project will replace two existing commercial buildings whose leases expire near expected entitlement completion.

Financing was provided by a $1B residential opportunity fund. The fund capitalized 100% of the project costs with zero equity investment from the developer. The developer earned a market-rate development fee plus… Show more

Fident Capital secured $24MM of project financing for the acquisition, entitlement, and development of an 18 townhome project in La Jolla, California. The project will replace two existing commercial buildings whose leases expire near expected entitlement completion.

Financing was provided by a $1B residential opportunity fund. The fund capitalized 100% of the project costs with zero equity investment from the developer. The developer earned a market-rate development fee plus performance-based profit participation; the final tier of the waterfall allowed the developer to earn 30% of profit.

This project held numerous challenges. First, the developer’s capital constraints made providing an equity co-investment and/or recourse guarantees challenging. Second, the unentitled land presented significant obstacles to the development viability. Third, the project’s existing tenants held extension rights which made timelines uncertain. Finally, rapid appreciation in the area made validating pro forma values near impossible.

Fident understood that the operational track record of the developer and the "A" location asset might allow equity to overlook the critical items of co-investment and debt guarantees. By working with the more entrepreneurial partners within their network, they sourced equity that supported a fee development approach.

The developer’s entitlement counsel illuminated the challenges and pitfalls to be avoided; all parties agreed that entitlement risks were manageable. Selling brokers and legal counsel mitigated the risks of lease renewals and eminent domain by securing a lease buy-out prior to close. Finally, Fident’s thorough, organic research and analysis illuminated the reasonableness of revenue projections. Pro forma returns, in excess of 30% on costs, also provided offsets for the project's risk.
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Fident Capital secured $6.6MM of Joint Venture Equity for the off-market acquisition of a non-performing note. The loan, secured by over 50 acres of land in the Spring Valley submarket of San Diego County, held a $41MM unpaid balance.

The Sponsor seeks to foreclose upon the property. After gaining fee title, the Sponsor will sell a portion of the site, already entitled for residential use, thereby recapturing about 80% of the project’s required equity. The remainder of the site will… Show more

Fident Capital secured $6.6MM of Joint Venture Equity for the off-market acquisition of a non-performing note. The loan, secured by over 50 acres of land in the Spring Valley submarket of San Diego County, held a $41MM unpaid balance.

The Sponsor seeks to foreclose upon the property. After gaining fee title, the Sponsor will sell a portion of the site, already entitled for residential use, thereby recapturing about 80% of the project’s required equity. The remainder of the site will likely be re-entitled from primarily commercial uses into residential lots, providing substantial upside.

Fident Capital identified an opportunistic equity partner specialized in distressed situations who has purchased over $1.3B in assets since 2008, primarily in non-performing and sub-performing notes. The equity partner provided 95% of the equity. The Sponsor, in addition to acquisition and management fees, earns a 24% profit split above a 10% preferred return and 43% profit split above a 20% IRR.

The project faced considerable challenges. First was the need for speed. The bank executed another contract keeping the Sponsor’s offer in second position as a fallback. After nearly a year-long sales process the Sponsor was required to conduct all due diligence parallel to the other buyer, hoping they would step away. When they did, only 1 week was allowed to complete the closing, which included execution of a joint venture operating agreement.

Additional challenges included a litigious borrower and complex entitlements. Furthermore, due diligence uncovered more significant site constraints than originally anticipated. However, through research, creative planning, and the Sponsor’s considerable entitlement experience all parties gained comfortable with the risks of the project.

Fident’s early identification of a partner skilled in note acquisition greatly mitigated execution risk and sped up transaction velocity. Show less

Fident Capital secured a $5.1MM construction loan for the development of a 21-unit multifamily project located in the National City, one of the fastest-growing submarkets in the San Diego MSA. A regional bank provided 75% LTC financing at a competitive rate with very low transaction costs.

New construction in the submarket benefits from strong lease-up and some of the highest occupancy rates in the county. The mix of one, two and three-bedroom units will satisfy the demands for a variety… Show more

Fident Capital secured a $5.1MM construction loan for the development of a 21-unit multifamily project located in the National City, one of the fastest-growing submarkets in the San Diego MSA. A regional bank provided 75% LTC financing at a competitive rate with very low transaction costs.

New construction in the submarket benefits from strong lease-up and some of the highest occupancy rates in the county. The mix of one, two and three-bedroom units will satisfy the demands for a variety of workforce tenants. The infill project sits in the heart of National City, steps away from retail, community amenities, schools, and transit.

Challenges to the project included a lack of directly comparable products within the immediate area as the surrounding inventory is quite dated. After securing competitive bank financing, a poor appraisal process and report led to a significant decrease in the bank’s proposed loan proceeds. In response, Fident segmented the lender’s poor understanding of the market by assembling substantial new market data and delivering it to the lender in a supplemental package, as well as pointing out “areas for improvement” in the original appraisal. The result was that we protected the originally agreed-upon leverage and facilitated a successful close. Show less

Fident Capital secured $5.1MM of acquisition financing for a proposed 154-unit multifamily development in the Hillcrest neighborhood of San Diego. The borrower is an established construction company with a nationwide presence. The debt was sourced from a private lender who provided a 12-month term at 69% leverage. The financing allowed the borrower to fund a portion of the acquisition, demolition, and remaining soft costs to bring the project to a shovel-ready condition.

This… Show more

Fident Capital secured $5.1MM of acquisition financing for a proposed 154-unit multifamily development in the Hillcrest neighborhood of San Diego. The borrower is an established construction company with a nationwide presence. The debt was sourced from a private lender who provided a 12-month term at 69% leverage. The financing allowed the borrower to fund a portion of the acquisition, demolition, and remaining soft costs to bring the project to a shovel-ready condition.

This assignment’s primary challenge was meeting a tight timeframe for securing acquisition debt to close a short escrow. Fident packaged the deal in four business days and brought it to several close capital relationships who could quickly provide terms for the financing. Fident’s materials provided a clear view of the investment, allowing potential lenders to quickly digest the proposed project, the sponsorship behind it, and its context within the market.

Another hurdle was navigating some of the nuance related to the borrower’s land basis. The borrower’s expertise with the City of San Diego’s recent Complete Communities initiative led to an acquisition at an attractive $35k/unit where comparable sites regularly trade in excess of $80k/unit. Even though the borrower’s basis was very compelling in a per unit context, pushing the basis too hard caused some potential lenders to contest the land value in terms of price per square foot, which was higher than the comp set due to the project’s unique unit mix of sub-500 SF studio and 1-bedroom units. Fident conducted a thorough analysis of recent sales in the area to identify comparable micro-unit projects that traded at similar price per square foot values.

Despite these challenges, the quality of the real estate itself and the borrower’s high density entitlement strategy contributed to a successful effort. Fident is pleased to play a role in bringing well-designed and well-located housing to one of San Diego’s most dynamic neighborhoods. Show less

Fident Capital secured a $4.5MM cash-out term loan for a mixed-use property located in the Pacific Beach submarket of San Diego, California. The 12-unit building held eight 3- and 4- bedroom units, plus four commercial units. A regional bank, which allowed for a 60-day rate lock upon execution of the term sheet, provided the 10-yr fixed-rate financing at 70% LTV at a 3.60% rate.

The project’s ground lease presented significant challenges to the project financing. The lease, which was the… Show more

Fident Capital secured a $4.5MM cash-out term loan for a mixed-use property located in the Pacific Beach submarket of San Diego, California. The 12-unit building held eight 3- and 4- bedroom units, plus four commercial units. A regional bank, which allowed for a 60-day rate lock upon execution of the term sheet, provided the 10-yr fixed-rate financing at 70% LTV at a 3.60% rate.

The project’s ground lease presented significant challenges to the project financing. The lease, which was the basis for starting the development some 6 years prior, provided poor “see through” with the lease to “reset to market” every 25-years intervals over its 99 year term. The immense amount of potential variance between year 25 and year 26 ground rent, based upon the language, saw many lenders uncomfortable with bracketing the future ground rent obligations and the implications for project NOI that would service the debt.

The solution was found in a bank willing to do the work and approaching the land lessor push the market reset date beyond 20 years from the close (10 years for this loan, and 10 years for the future perm loan). Other challenges came from the agency lenders orientation to risk in the heart of the COVID pandemic. Sub $6MM loans were pricing well wide of the banks, mixed-use was not an accepted asset type, and no agency was willing to process the complexity of the land lease on such a small loan. Show less

Fident Capital secured a $4.0MM cash-out, non-recourse, term loan for the refinance of a 26-unit multifamily property located in National City, California. A regional bank provided the 10-yr fixed financing for a 3.35% rate with no fees, allowing a 60-day rate lock and closing as advertised within the term sheet.

The two identical, 3-story buildings contain two- and three-bedrooms units with a multigenerational tenant mix in one of the most relatively affordable areas of San Diego. The… Show more

Fident Capital secured a $4.0MM cash-out, non-recourse, term loan for the refinance of a 26-unit multifamily property located in National City, California. A regional bank provided the 10-yr fixed financing for a 3.35% rate with no fees, allowing a 60-day rate lock and closing as advertised within the term sheet.

The two identical, 3-story buildings contain two- and three-bedrooms units with a multigenerational tenant mix in one of the most relatively affordable areas of San Diego. The project enjoys strong financial performance, superior freeway access, below market rents, and low vacancy.

Challenges included the non-recourse loan request and structuring a loan that would repay the existing debt plus repatriate borrower equity while keeping debt service at roughly the same level. Show less

Fident Capital secured $4.8MM of joint venture equity and $16.9MM (75% LTC, 69% LTV) of non-recourse construction debt for a 50-unit multifamily development in the Carmel Mountain Ranch area of North County, San Diego. The sponsor, a longtime Fident client, specializes in infill multifamily development and has completed numerous successful projects throughout San Diego County. Fident sourced the equity from a close capital relationship based in Southern California, who will provide 85% of the… Show more

Fident Capital secured $4.8MM of joint venture equity and $16.9MM (75% LTC, 69% LTV) of non-recourse construction debt for a 50-unit multifamily development in the Carmel Mountain Ranch area of North County, San Diego. The sponsor, a longtime Fident client, specializes in infill multifamily development and has completed numerous successful projects throughout San Diego County. Fident sourced the equity from a close capital relationship based in Southern California, who will provide 85% of the project’s equity. Fident sourced the project’s construction financing from a private debt fund based out of Salt Lake City.

A primary challenge was managing concurrent closings of debt and equity. Fident coordinated all relevant parties, compiled due diligence items, and facilitated weekly calls to keep the closing process on track. Prior to closing, another challenge was educating capital about the nuances of the proposed project itself in terms of its construction type, unit mix, and large affordable component. As a transit-oriented, adaptive reuse development that utilizes an abandoned two-story “park and ride” facility as its podium, the projects smaller units proved difficult to comp in a largely suburban submarket. Fident provided ample market research and support for the project and its proposed rents to both potential lenders and the appraiser.

Another challenge of the deal was raising capital in a rapidly rising interest rate and construction cost environment, which squeezed the deal’s returns. Fident uncovered new revenue sources to help bring returns back in balance. Fident’s marketing materials also emphasized the high quality of the real estate itself, including its proximity to high-paying tech jobs and the new $445MM Apple corporate campus in Rancho Bernardo. Fident was thrilled to help get this project out of the ground and bring badly-needed new housing to a desirable and highly supply-constrained area of San Diego County. Show less

Fident Capital secured $56MM of construction financing for the development of a mixed-use project containing 77 multifamily units and a 22,000 SF medical office building in the Bankers Hill submarket of San Diego. The senior debt was sourced from a regional bank that provided 70% leverage with a sub-3% rate. The secondary financing came from a private group whose last dollar came to 88% LTC. The balance of equity came from the sponsor, a repeat Fident client over the years. The blended cost for… Show more

Fident Capital secured $56MM of construction financing for the development of a mixed-use project containing 77 multifamily units and a 22,000 SF medical office building in the Bankers Hill submarket of San Diego. The senior debt was sourced from a regional bank that provided 70% leverage with a sub-3% rate. The secondary financing came from a private group whose last dollar came to 88% LTC. The balance of equity came from the sponsor, a repeat Fident client over the years. The blended cost for this A/B piece execution was around 6.27%.

This financing presented a myriad of challenges. Chief amongst them was getting capital comfortable with the shared parking, both in terms of capacity and monetization. The sponsors’ 167 parking stalls are mechanized and shared; permanent parking goes to very few apartment tenants on a 24/7 basis so that the medical office tenants can be provided 3 per thousand parking spaces during the workday, via a valet service. This thoughtful use of the parking resource proves highly lucrative but requires considerable explanation for both capital and the appraisal community.

Top-flight sponsorship, strong credit, very high-quality real estate, and the remarkable rent growth, job creation, and favorable demographics of the San Diego market provided an abundance of choices for the project’s financing. However, but for the tenure and professionalism of those brought to the table, the project may not have closed as smoothly and as timely as it did. We are thrilled have been a part of this successful close and the creation of what is sure to be a trophy asset within Bankers Hill for years to come. Show less

Fident Capital secured high leverage mezzanine financing for acquisition, entitlement, and condominium conversion of a 21-unit apartment complex in Valley Village, CA. The 1980's vintage apartment building was a mix of 2 and 3 bedroom units in original condition and with considerable deferred maintenance.

Project challenges for this off-market transaction included quickly assessing the viability of sale prices for the atypical floor plans and securing sufficient purchase capital within… Show more

Fident Capital secured high leverage mezzanine financing for acquisition, entitlement, and condominium conversion of a 21-unit apartment complex in Valley Village, CA. The 1980's vintage apartment building was a mix of 2 and 3 bedroom units in original condition and with considerable deferred maintenance.

Project challenges for this off-market transaction included quickly assessing the viability of sale prices for the atypical floor plans and securing sufficient purchase capital within a three week timeframe. Conventional third party market studies were not expedient enough to support the transaction so Fident Capital and the developer underwrote the project for presentation to a known capital partner, resulting in a fast successful close.

Financing was provided through a regional investor via high-leverage mezzanine financing that priced similarly to joint venture equity.
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Fident Capital secured $1.2M of high leverage mezzanine financing for acquisition, entitlement, and condominium conversion of a 21-unit apartment complex in Valley Village, CA. The 1980s vintage apartment building was a mix of 2 and 3 bedroom units in original condition and with considerable deferred maintenance.

Project challenges for this off-market transaction included quickly assessing the viability of sale prices for the atypical floor plans and securing sufficient purchase capital… Show more

Fident Capital secured $1.2M of high leverage mezzanine financing for acquisition, entitlement, and condominium conversion of a 21-unit apartment complex in Valley Village, CA. The 1980s vintage apartment building was a mix of 2 and 3 bedroom units in original condition and with considerable deferred maintenance.

Project challenges for this off-market transaction included quickly assessing the viability of sale prices for the atypical floor plans and securing sufficient purchase capital within a three week timeframe. Conventional third party market studies were not expedient enough to support the transaction so Fident Capital and the developer underwrote the project for presentation to a known capital partner, resulting in a fast successful close.

Financing was provided through a regional investor via high-leverage mezzanine financing that priced similarly to joint venture equity. Show less

Fident Capital secured mezzanine financing for Campus Walk Condominiums, an 88-unit residential project consisting of seven four-story buildings immediately adjacent to the University of Arizona’s western border and within walking distance to the popular University Avenue. Campus Walk was a well-timed and substantial for-sale offering in the chronically under-supplied university area sub-market.

Challenges to the proposed condominium conversion included articulating the vibrancy of this… Show more

Fident Capital secured mezzanine financing for Campus Walk Condominiums, an 88-unit residential project consisting of seven four-story buildings immediately adjacent to the University of Arizona’s western border and within walking distance to the popular University Avenue. Campus Walk was a well-timed and substantial for-sale offering in the chronically under-supplied university area sub-market.

Challenges to the proposed condominium conversion included articulating the vibrancy of this niche “kiddie condo” and investor offering in a marketplace faced with increasing inventory levels and slowing absorption rates. Further challenges included a mid-school-year acquisition and high occupancy rates until year end and proving the retail value of the converted property in an area with scarce direct comparable's.

Financing was provided through a high leverage mezzanine structure which provided pricing significantly below typical joint venture equity rates. The loan was non-recourse with the exception of standard carve-outs. No presales were required prior to close.
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Fident Capital secured $8.1MM (73% LTC, 56% LTV) of bridge financing for a 42-unit motel-to-multifamily conversion in the La Mesa submarket of San Diego, CA. The borrower, a repeat Fident client, has built numerous successful rental and for-sale residential communities in the Greater San Diego Area. The lender, a private debt fund based out of New York, provided non-recourse financing in excess of the requested 70% LTC.

A primary challenge of the assignment was proving out pro forma… Show more

Fident Capital secured $8.1MM (73% LTC, 56% LTV) of bridge financing for a 42-unit motel-to-multifamily conversion in the La Mesa submarket of San Diego, CA. The borrower, a repeat Fident client, has built numerous successful rental and for-sale residential communities in the Greater San Diego Area. The lender, a private debt fund based out of New York, provided non-recourse financing in excess of the requested 70% LTC.

A primary challenge of the assignment was proving out pro forma revenue assumptions for unit sizes that fell between typical studios and one-bedrooms. Fident’s extensive analysis garnered a comp set that demonstrated the subject property’s relative whole dollar value proposition when compared to competitive one-bedroom units. Fident also presented recent multifamily sales that supported the project’s as-stabilized value.

Another challenge of the financing was to assuage lender concerns about the property’s zoning and use. While the proposed residential use was permitted in this commercially zoned area, the borrower satisfied residential density regulations by utilizing the state density bonus and designating several of the units as affordable.

Despite the challenges, a strong 6.5% cap on cost, coupled with the favorable multifamily demographic tailwinds in the submarket, fueled plenty of lender interest. The existing motel property itself was also ripe for conversion, with recent building upgrades, kitchenettes already in place, and suite-style floorplans and larger unit sizes than traditional motel/hotel rooms.

After creating a market and procuring term sheets, Fident successfully countered the winning lender. The winning terms exceed the pro forma proceeds sought. The structure also offers an 80 bps stepdown in rate upon 12% project occupancy, a compelling structure for a relatively light value-add project. Show less

Fident Capital secured a $12.0MM non-recourse bridge loan at certificate of occupancy for a 4-story, 43-unit multifamily project in Chula Vista, California. A private debt fund provided the high-leverage financing which repaid the construction loan, repatriated a significant portion of the project’s equity, and dropped the cost of debt financing. Rate savings at close of 225 basis points increased, incrementally, with occupancy hurdles to a 290 basis point savings at 70% occupancy. After only… Show more

Fident Capital secured a $12.0MM non-recourse bridge loan at certificate of occupancy for a 4-story, 43-unit multifamily project in Chula Vista, California. A private debt fund provided the high-leverage financing which repaid the construction loan, repatriated a significant portion of the project’s equity, and dropped the cost of debt financing. Rate savings at close of 225 basis points increased, incrementally, with occupancy hurdles to a 290 basis point savings at 70% occupancy. After only 6 months, the loan offered an open prepayment.

The four-story, walk-up project delivered a mix of studio, one-, two-, and three-bedroom units into one of the most walkable locations in western Chula Vista’s downtown area, 3rd Avenue. The units cater to the entire market, offering competitive finishes with covered carports and a roof-top deck with grill, fire pits, and lounge chairs. The location provides tenants easy freeway access to major employment centers, and schools within walking distance. Challenges to the project included the non-recourse request and the fact that only 15% of the project was leased (on a temporary certificate of occupancy) when we approached the market, which limited the competitive lender pool. Additionally, loan proceeds needed to return a significant portion of equity with a minimal prepayment penalty to be compelling. Armed with project-specific knowledge from having placed the development capital, Fident was able to attract a pragmatic, value-focused, lender that delivered maximum proceeds at an interest-only rate which competed with local banks and agency lenders. The deal closed in 5 weeks. Show less

Fident Capital secured the acquisition and development financing for a 327 town home development located upon 30.5 acres adjacent to Interstate 15 in Menifee, California.

The project sponsor, who had a long record of successful development, was unable to rely upon their existing lenders because of the destabilized lending environment for residential developments in Riverside County. Fident Capital was able to effectively underwrite the transaction and locate a lender who understood the… Show more

Fident Capital secured the acquisition and development financing for a 327 town home development located upon 30.5 acres adjacent to Interstate 15 in Menifee, California.

The project sponsor, who had a long record of successful development, was unable to rely upon their existing lenders because of the destabilized lending environment for residential developments in Riverside County. Fident Capital was able to effectively underwrite the transaction and locate a lender who understood the opportunity. Challenges included proving the vibrancy of attached product in a predominately detached housing market, finding a lender who could advance adequate loan proceeds at close, and validating pro forma pricing.

The loan covered a 24-month term with extensions available. The borrower had the option to convert the Acquisition and Development facility to a $40M construction revolver covering 90% of cost upon commencement of vertical construction. No presales were required.
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Fident Capital secured $3.6MM of joint venture equity for the development of 19, two and three-story townhomes in the highly supply-constrained and walkable San Diego neighborhood of Golden Hill, and $3.5MM of joint venture equity for the acquisition and development of a 17-unit townhome project in Point Loma, one of San Diego’s premier coastal markets. A private investment firm provided the equity.

Both developments will deliver new, attainable, product to areas with limited supply… Show more

Fident Capital secured $3.6MM of joint venture equity for the development of 19, two and three-story townhomes in the highly supply-constrained and walkable San Diego neighborhood of Golden Hill, and $3.5MM of joint venture equity for the acquisition and development of a 17-unit townhome project in Point Loma, one of San Diego’s premier coastal markets. A private investment firm provided the equity.

Both developments will deliver new, attainable, product to areas with limited supply. These central locations provide good proximity to major employment centers, schools, and the recreational amenities that add to each neighborhoods’ livability.

The three-story product comes with private two-car garages and target first or move-up home buyers who prefer the amenities of a new home, more energy efficient living, and modern architecture over the old and more expensive inventory of Victorian, Craftsman, and Colonial Revival homes which dominate San Diego’s close-in older neighborhoods.

Challenges to the project included re-marketing the Golden Hill deal after the original equity source paused operations at the closing table due to general COVID-induced uncertainty, the market for for-sale housing, and their CLO portfolio. Additionally, the relatively small check size for each project dramatically diminished the buyer pool. Fortunately, merging timelines allowed both deals to be presented as a larger investment opportunity which increased interest and ultimately lead to a successful close. The projects’ performance is not crossed, each stands as an individual investment. Show less

Fident Capital secured a $31.3MM construction loan for the development of an 87-unit multifamily project in National City, just south of Downtown San Diego. The borrower, a repeat Fident client, is an experienced owner-developer with a strong track record of building successful multifamily projects in the greater San Diego area, particularly within the National City submarket. Although Fident originally set out to procure both debt and equity – and successfully secured multiple bids for both… Show more

Fident Capital secured a $31.3MM construction loan for the development of an 87-unit multifamily project in National City, just south of Downtown San Diego. The borrower, a repeat Fident client, is an experienced owner-developer with a strong track record of building successful multifamily projects in the greater San Diego area, particularly within the National City submarket. Although Fident originally set out to procure both debt and equity – and successfully secured multiple bids for both (including 7 equity bids) – the optimal solution ended up being a stretch-senior construction loan that provided the borrower with their entire ask, at a sizing of 94% LTC. The lender was a private debt fund based out of Southern California.

Fident captured the attention of capital and yielded numerous offers in a challenging capital markets environment. Chief among the deal’s strengths were National City’s workforce housing demographics, which largely stem from its location next to two major military bases. The project also enjoyed an attractive land basis and by-right entitlements. Fident emphasized the sponsor’s long-standing, successful track record in developing multifamily product within National City and provided in-depth market research to support the deal’s underwriting assumptions. The marketing materials focused particular attention on the owner-builder’s expertise with cost-effective building design, illustrating to potential capital sources the solidity of their business plan and their mastery of the notoriously risk-laden construction process.

Despite the project’s myriad challenges, Fident’s marketing of the high-quality sponsorship, the owner-builder’s proficiency with cost control and design, and the favorable demographics of the gentrifying National City market provided our client with an array of choices for the project’s financing. Fident secured financing that exceeded the client’s expectations and ended up being highly accretive to the project’s returns. Show less

Fident Capital secured a $31.3MM construction loan for the development of an 87-unit multifamily project in National City, just south of Downtown San Diego. The borrower, a repeat Fident client, is an experienced owner-developer with a strong track record of building successful multifamily projects in the greater San Diego area, particularly within the National City submarket. Although Fident originally set out to procure both debt and equity - the optimal solution ended up being a… Show more

Fident Capital secured a $31.3MM construction loan for the development of an 87-unit multifamily project in National City, just south of Downtown San Diego. The borrower, a repeat Fident client, is an experienced owner-developer with a strong track record of building successful multifamily projects in the greater San Diego area, particularly within the National City submarket. Although Fident originally set out to procure both debt and equity - the optimal solution ended up being a stretch-senior construction loan that provided the borrower with their entire ask, at a sizing of 94% LTC.

The deal included a complicated acquisition involving a partnership buyout where the borrower received the land as an in-kind distribution. Another challenge was the borrower, who was self-performing as the project’s general contractor, was not working under a GMP contract, and did not pursue bonding. This situation required special attention from interested capital sources, increasing their scrutiny of the deal and its guarantors, which in turn provided additional questions to address as the deal was marketed. A final challenge of the financing was navigating various delays related to third party reports in a volatile cost environment.

Chief among the deal’s strengths were National City’s favorable workforce housing demographics, which largely stem from its location next to two major military bases. The project also enjoyed an attractive land basis and by-right entitlements. Fident emphasized the sponsor’s long-standing, successful track record in developing multifamily product within National City and provided in-depth market research to support the deal’s underwriting assumptions. The marketing materials focused particular attention on the owner-builder’s expertise with cost-effective building design, illustrating to potential capital sources the solidity of their business plan and their mastery of the notoriously risk-laden construction process. Show less

Fident Capital secured a $3.7MM cash-out, predevelopment loan to fund a portion of the land and soft costs (including a development management fee), associated with a by-right development of a 3-story, 96-unit multifamily project in National City, CA. The project will provide the community with a mix of one-bedroom and two-bedroom market-rate units.

The client’s off-market acquisition of the subject property’s assemblage provided for a demonstrably attractive land basis. This, coupled… Show more

Fident Capital secured a $3.7MM cash-out, predevelopment loan to fund a portion of the land and soft costs (including a development management fee), associated with a by-right development of a 3-story, 96-unit multifamily project in National City, CA. The project will provide the community with a mix of one-bedroom and two-bedroom market-rate units.

The client’s off-market acquisition of the subject property’s assemblage provided for a demonstrably attractive land basis. This, coupled with the fact that the client’s ownership stemmed from an in-kind profit distribution and partnership buy-out following the successful development of the adjacent property with prior a JV equity partner proved challenging for many potential lenders to underwrite. The lender, a private fund based in Southern California, saw through the tax sheltering moves and cash contributions to understand the true imputed land equity. They provide some cash to the borrower, funded 12 months of development management fees, and capitalized the entire go-forward cost required to make the project “shovel ready.” The non-recourse loan was funded at 50% LTV and closed quickly, “as advertised,” within the original term sheet.

Other challenges to the financing included the extensive marketing required by Fident the during COVID-19 disruption which brought a high degree of scrutiny to demographic shifts and employment trends. Additionally, the early stage of project design and approval, mixed-zoning, and the non-recourse mandate all needed addressing. Show less

Fident Capital secured a $2.5MM construction loan for the development of a 7,230 SF retail center located in the Encanto neighborhood of San Diego, California. A regional bank provided the 65% LTC financing for a 4.25% rate.

The Opportunity Zone neighbors a major intersection and transportation hub in an undersupplied area. The project will provide some of the only new construction in the surrounding area and consists of a two-unit commercial building with an adjacent pad that will be… Show more

Fident Capital secured a $2.5MM construction loan for the development of a 7,230 SF retail center located in the Encanto neighborhood of San Diego, California. A regional bank provided the 65% LTC financing for a 4.25% rate.

The Opportunity Zone neighbors a major intersection and transportation hub in an undersupplied area. The project will provide some of the only new construction in the surrounding area and consists of a two-unit commercial building with an adjacent pad that will be leased to a national tenant.

Challenges to the project included a complete project stall associated with lender pulling back due to the general COVID-induced shutdown and stay at home orders. Re-marketing the deal after the pause saw a dramatically diminished pool of potential lenders due to global concerns surrounding the retail asset class, the small check size, and a lack of pre-leasing. Show less

Fident Capital secured a bridge loan for acquisition and condominium conversion of a 54,000 square foot medical office building located in Gilbert, Arizona.

The property was built in 1986 and received a complete exterior rehabilitation in 2006. Upon acquisition, building occupancy was at 78% with a mix of long- and short-term tenants with rates at and below market value. The seller disposed of the property at a market cap rate based upon in-place cash flow. The borrower saw upside in… Show more

Fident Capital secured a bridge loan for acquisition and condominium conversion of a 54,000 square foot medical office building located in Gilbert, Arizona.

The property was built in 1986 and received a complete exterior rehabilitation in 2006. Upon acquisition, building occupancy was at 78% with a mix of long- and short-term tenants with rates at and below market value. The seller disposed of the property at a market cap rate based upon in-place cash flow. The borrower saw upside in placing a condominium map on the property, selling the space leased to long-term credit tenants and holding the remaining space for long-term investment.

Project challenges included a sponsor who was a relatively new entrant into the office condo space with a credit history not easily understood by banks and a need for a quick close. Additionally, the business plan needed to be validated in terms of retail pricing, rehabilitation costs, and absorption rates.

A private lender funded the deal at 81% loan-to-cost on an 18-month term with a six month extension available. No presales were required.
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Fident Capital secured a land loan for Highlands Ranch, a 176-acre assemblage located in Spring Valley, CA. The borrower was processing entitlements on the property for 211 single-family residences, which provide some of the best views in South County.

Financing challenges included a borrowing entity in Chapter 11 bankruptcy, a partially complete and lengthy entitlement process with San Diego County, a storied project past, and an extended court-driven closing process.

The loan… Show more

Fident Capital secured a land loan for Highlands Ranch, a 176-acre assemblage located in Spring Valley, CA. The borrower was processing entitlements on the property for 211 single-family residences, which provide some of the best views in South County.

Financing challenges included a borrowing entity in Chapter 11 bankruptcy, a partially complete and lengthy entitlement process with San Diego County, a storied project past, and an extended court-driven closing process.

The loan covered a 12 month term with a six month option and was priced at 11% plus two points. Loan proceeds paid off existing debt, established an interest reserve, and provided working capital to further the entitlement effort. The loan is non-recourse with the exception of standard carve-outs.
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Fident Capital secured a $6.7MM construction loan for the development of a 14-unit townhome project located in the Pacific Beach submarket of San Diego, California. A regional bank provided the 80% LTC, recourse, financing at a 4.00% rate with very low transaction costs.

The infill project rests between the main Pacific Beach arterials of Grand Avenue and Garnet Avenue, steps away from the area’s restaurants, coffee houses, bars, nightlife, beaches, parks and plethora of unique… Show more

Fident Capital secured a $6.7MM construction loan for the development of a 14-unit townhome project located in the Pacific Beach submarket of San Diego, California. A regional bank provided the 80% LTC, recourse, financing at a 4.00% rate with very low transaction costs.

The infill project rests between the main Pacific Beach arterials of Grand Avenue and Garnet Avenue, steps away from the area’s restaurants, coffee houses, bars, nightlife, beaches, parks and plethora of unique retailers. The development will deliver new, attainable condominium product to an area with severely limited supply. The three-story, two-bedroom townhomes come with one-car garages, roof-top patios, and target first time or move-up home buyers who prefer the amenities of a new home and modern architecture over the older and more expensive inventory nearby.

Challenges to the project included high values per unit which, while attainable for San Diego, fall above the average regional home price and are quite expensive by national standards. Additionally, the project required two units to be designated as affordable rental stock, to be held by the developer, and rented to income-qualified tenants. The team needed to liaise with the San Diego Housing Commission and lender to establish that the mixed collateral and the housing commission’s subordinate deed restriction for the affordable units provided the appropriate flexibility to the lender in the event of default. Finally, construction commenced before the financing closed which required title to address lien priority and provide the lender comfort with their senior position. Show less

Fident Capital facilitated the off-market sale and of a 126-unit multifamily development located in an Opportunity Zone within Carson City, Nevada. A developer-client engaged Fident to source construction financing and joint-venture equity for the proposed development. The onset of COVID changed the client’s financial picture dramatically. The partners most capable of securing the large construction loan required by the project held the majority of his portfolio in the hospitality space and saw… Show more

Fident Capital facilitated the off-market sale and of a 126-unit multifamily development located in an Opportunity Zone within Carson City, Nevada. A developer-client engaged Fident to source construction financing and joint-venture equity for the proposed development. The onset of COVID changed the client’s financial picture dramatically. The partners most capable of securing the large construction loan required by the project held the majority of his portfolio in the hospitality space and saw a precipitous drop in cash flow. As such, they neither had the appetite, nor the capacity to sign the project’s required loan guarantees.

The transaction closed, and the acquiring builder/developer retained Fident for the downstream capital raise.

Walking distance from downtown Carson City, the location offers tenants immediate access to the core amenities, employment centers and schools, within this state capitol. Lake Tahoe (and a slew of Sierra Nevada amenities), fall just a 20-minute drive west; Reno is just 30 minutes north. The project offers the market a Class-A, garden-style, walk-up complex with one-and two-bedroom units.

Challenges to the project included the tertiary nature of the location and a lack of direct comparable product in the immediate area given the dated nature of the surrounding inventory. The re-marketing of the deal also proved challenging given the general COVID-induced uncertainty that significantly impacted the construction lending options available for a non-recourse request. Fortunately, pandemic-induced demographic shifts further exacerbated Carson City’s decades-long undersupply of housing stock, a condition that was easily validated by third-party market research.

This truly off-market transaction allowed our client to profitably sell the development to a sophisticated buyer who could see the opportunity (which countless others had missed) and it brought the buyer a deal they may not have been able to source through conventional means. Show less

Fident Capital secured $9.8MM of horizontal construction financing for a 14-lot residential development located in San Diego’s prestigious La Jolla submarket. The 5-acre site will offer ocean-view lots that average 11,000 square feet to homeowners and spec. builders looking to develop on these $1.5MM finished parcels.

Following the successful entitlement of the site (previously a City-owned residential water reservoir), the client found their incumbent lender unwilling to proceed with… Show more

Fident Capital secured $9.8MM of horizontal construction financing for a 14-lot residential development located in San Diego’s prestigious La Jolla submarket. The 5-acre site will offer ocean-view lots that average 11,000 square feet to homeowners and spec. builders looking to develop on these $1.5MM finished parcels.

Following the successful entitlement of the site (previously a City-owned residential water reservoir), the client found their incumbent lender unwilling to proceed with the project due to concerns around for-sale housing and economic implications of COVID-19.

Fident jumped into the fray and quickly heard dozens more lenders pass on the opportunity due to concerns around the impact of the virus on high-end residential product. Fident knew that delivering 14 finished lots, of this quality, into the La Jolla market was a rare opportunity and extremely valuable. Reaching out to over 100 capital sources, Fident secured a private lender that understood the merit and durability of the borrower’s business plan.

The lender provided non-recourse, cash-out, financing under a compressed timeframe that repatriated a significant portion of the borrower’s equity. This allowed the client to advance other real estate projects on the timeline they had originally anticipated.

Beyond the extensive marketing required, challenges included the lender’s inclusion of a syndicate partner who required education on the nuances of tentative maps, final maps, and the California Map Act before close. That delay risked triggering a late fee and paydown requirement from the incumbent lender, an issue Fident had to mitigate. Additionally, the non-recourse and cash-out components were not easily met. Show less

Fident Capital secured $15.5MM of joint venture equity for a 99-unit multifamily development proposed for the Serra Mesa neighborhood of San Diego. 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, who will provide 93% of the project’s equity. The $16.5MM funds in two phases; the first closes on the land and pays soft costs to secure… Show more

Fident Capital secured $15.5MM of joint venture equity for a 99-unit multifamily development proposed for the Serra Mesa neighborhood of San Diego. 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, who will provide 93% of the project’s equity. The $16.5MM funds in two phases; the first closes on the land and pays soft costs to secure a building permit and the second phase balances out the construction loan to fund vertical construction costs once the sponsor receives building permits.

A primary challenge of the assignment was bringing on an equity partner quite early in the project’s lifespan, before the sponsor had closed on the land, and months before receiving full entitlements or finalizing the budget. Fident overcame objections by emphasizing the strength of the deal, the project’s top-tier sponsorship, the strong submarket tailwinds, and the underlying quality of the real estate itself. Fident also distilled the project’s complexity into cohesive and digestible models that addressed numerous underwriting scenarios covering multiple product types over three distinct phases.

Even with the deal’s complexities, Fident created a market, placed the capital, and closed the deal in less than 45 days – in time for the sponsor’s land closing deadline. Fident’s knowledge of, and relationships within, the private equity landscape proved tantamount to locating capital that could look past the project’s pre-entitlement risks and instead focus on the lucrative investment opportunity at hand. A well-regarded and experienced sponsorship team bolstered these efforts with in-house market research and the know how to close the deal efficiently. Fident is pleased to play a role in bringing well-designed new housing to one of San Diego’s most centrally located residential communities Show less

Fident Capital secured $4.975MM of permanent financing for the Moss Apartments, a recently renovated 16-unit property in Chula Vista. The successful closing allowed the buyer to refinance out of a more expensive bridge loan. The borrower is a repeat Fident client and experienced local owner-operator with a portfolio of properties across the San Diego area. The lender was a regional bank, who provided the borrower with non-recourse, fixed-rate financing for a 7-year term at 65% LTV on appraised… Show more

Fident Capital secured $4.975MM of permanent financing for the Moss Apartments, a recently renovated 16-unit property in Chula Vista. The successful closing allowed the buyer to refinance out of a more expensive bridge loan. The borrower is a repeat Fident client and experienced local owner-operator with a portfolio of properties across the San Diego area. The lender was a regional bank, who provided the borrower with non-recourse, fixed-rate financing for a 7-year term at 65% LTV on appraised value.

The request for maximum proceeds, which was constrained by NOI and DSCR, required special attention. Fident performed a forensic analysis of the property’s operating statements to identify inconsistencies over time in revenue and operating expenses and determine the most advantageous way to present the property’s financials to potential lenders to protect the overall loan amount. Changes to the property management company, the renegotiation of contracts, the delay of utility reimbursements, and the rollover of several tenant leases created inconsistencies around financial performance that Fident helped to navigate and explain.

The rising interest rate environment contributed to a further squeeze on loan proceeds. Fident was able to help negotiate both a rate lock (at 4.25%) and a subsequent rate lock extension so that the borrower team could assemble all necessary documentation and keep the loan close on track according to the original lender term sheet. Another challenge was the lack of directly comparable product in the area; the subject property is comprised of 16 townhouse-style units with two levels of living space over private parking garages.

Despite these challenges, Fident was able to use our deep knowledge of the strong multifamily market in Chula Vista to produce multiple lender bids. Fident has closed several other financings with the lender that won the deal, and used this to advance the winning quote and help sell it to the bank’s lending committee. Show less

Fident Capital secured a $4.9MM bridge loan to complete the renovation and lease-up of a 16-unit multifamily project in San Diego’s Chula Vista submarket. A national private debt fund provided the non-recourse, interest only financing that repaid an earlier vintage bridge loan and funded remaining project costs.

The well located, three-story project offers the market three story, townhome-style, three-bedroom units with attached two-car garages. The client’s substantial renovation of… Show more

Fident Capital secured a $4.9MM bridge loan to complete the renovation and lease-up of a 16-unit multifamily project in San Diego’s Chula Vista submarket. A national private debt fund provided the non-recourse, interest only financing that repaid an earlier vintage bridge loan and funded remaining project costs.

The well located, three-story project offers the market three story, townhome-style, three-bedroom units with attached two-car garages. The client’s substantial renovation of over $150k per unit turned this blighted property into a vibrant source of middle-income housing in a supply-constrained neighborhood.

Challenges included a lack of direct comparable product within the immediate area, late stage cost increases that pushed the previous loan to its max proceeds and fairly aggressive interest rates. An approaching maturity date for the in-place bridge loan provided a sense of urgency to the financing.

Fident drew from comparables in both single-family and multifamily rental product to support the as-complete value of the product that proved unique to the marketplace. We also procured a lender who understood the borrower’s business plan, the past challenges, the strength of the location, and the dramatic value-add that had taken place. The loan provided interest only payments and flexible loan draw mechanisms that allowed the borrower to expediently complete the business plan. Show less

Fident Capital secured a $4.0MM cash out term loan for a multi-tenant, owner-user, office/industrial property located in San Diego’s Mira Mesa submarket. A regional bank provided the non-recourse financing. The close repatriated a significant portion of the borrower’s equity investment into the property.

The client originally sourced an off-market office acquisition and converted the Class C asset from an office and warehouse shell to Class-B creative office and biolab space. The… Show more

Fident Capital secured a $4.0MM cash out term loan for a multi-tenant, owner-user, office/industrial property located in San Diego’s Mira Mesa submarket. A regional bank provided the non-recourse financing. The close repatriated a significant portion of the borrower’s equity investment into the property.

The client originally sourced an off-market office acquisition and converted the Class C asset from an office and warehouse shell to Class-B creative office and biolab space. The location became the client company’s headquarters with the remaining space leased to a national biotech tenant.

Challenges to the financing included the chunky tenant mix, the owner-user occupying 60% of the space, disparate lease term expirations, and below market rents for the biotech tenant, which enticed their extensive T.I. buildout.

Fident procured a lender that could meet the client’s need for non-recourse, cash-out, quick close financing, with an open prepay. The lender understood the borrower’s business plan, ownership structure, strength of the location, and deep value-add that had taken place. The negotiated loan provided almost $1MM of cash-out and with a swap execution fixed for 10 years at a rate of 3.96%. Show less

Fident Capital secured $17.0MM of construction financing for a five story 55-unit multifamily development in the North Park submarket of San Diego, CA. The borrower is a vertically integrated builder/developer with a strong track record in the immediate area. A Salt Lake City based private lender provided non-recourse financing in excess of the requested LTC, closing as proposed within their term sheet.

A storied acquisition, attractive per square foot rental rates, and the… Show more

Fident Capital secured $17.0MM of construction financing for a five story 55-unit multifamily development in the North Park submarket of San Diego, CA. The borrower is a vertically integrated builder/developer with a strong track record in the immediate area. A Salt Lake City based private lender provided non-recourse financing in excess of the requested LTC, closing as proposed within their term sheet.

A storied acquisition, attractive per square foot rental rates, and the cost-effective building type produced an exceptionally strong deal which supported a land lift more than twice the developer’s cost basis. This, combined with the lenders’ flexibility on deferring (market rate) fees in lieu of contributing cash equity worked well to minimize the clients’ cash equity contributions.

Validating pro forma revenue assumptions was a primary challenge of the assignment. The project offered limited parking and unique loft/mezzanine units that offered superior livability to studios within a smaller floorplan than a one-bedroom; the units had no direct comparable. Fident demonstrated the project’s relative whole dollar value proposition against the competitive units through extensive analysis and creative presentation of the offering’s overall value proposition.

Despite the challenges, the project’s strong pro forma cap on cost of 7.25% and the favorable multifamily submarket demographics fueled lender interest. Even during that turbulent capital markets environment, when many lenders were otherwise inundated with loan requests and highly selective, Fident found a competitive market. The winning terms exceeded the loan proceeds sought by the borrower. The lender also has a deep knowledge of the building industry and supported the borrower’s desire to delay buying out the building trades to secure cost savings. Importantly, the lender operates unlevered, removing risks to close and future draws that could come with lenders reliant on the secondary financing markets. Show less

Fident Capital secured a bridge loan and mezzanine loan for the acquisition, rehabilitation, and adaptive reuse of the 67,000 square foot vacant office building in San Diego, CA. The asset was re-positioned into an exclusive office condominium offering.

Challenges to financing included proving the vibrancy of for-sale office product in a market with few comparables, finding a senior lender who could advance adequate proceeds at a close expected to occur prior to receiving entitlements… Show more

Fident Capital secured a bridge loan and mezzanine loan for the acquisition, rehabilitation, and adaptive reuse of the 67,000 square foot vacant office building in San Diego, CA. The asset was re-positioned into an exclusive office condominium offering.

Challenges to financing included proving the vibrancy of for-sale office product in a market with few comparables, finding a senior lender who could advance adequate proceeds at a close expected to occur prior to receiving entitlements, and a borrower whose primary development experience was in the residential space.

The loans covered an 18 month term, each with a six-month extension options. The mezzanine loan was non-recourse with the exception of standard carve-outs. No presales were required by either lender. The borrower’s co-investment at close was 2.5% of project cost.
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Fident Capital secured a $23.8MM construction loan for the development of a 60-unit multifamily project in Vista, a growing submarket of North San Diego County. The borrower, a repeat Fident client, is a local multifamily developer who has built numerous for-sale residential and multifamily rental projects of a similar scale across San Diego County. The winning bid exceeded the borrower’s original ask, at a sizing of over 97% LTC. The lender was a private debt fund based out of the Salt Lake… Show more

Fident Capital secured a $23.8MM construction loan for the development of a 60-unit multifamily project in Vista, a growing submarket of North San Diego County. The borrower, a repeat Fident client, is a local multifamily developer who has built numerous for-sale residential and multifamily rental projects of a similar scale across San Diego County. The winning bid exceeded the borrower’s original ask, at a sizing of over 97% LTC. The lender was a private debt fund based out of the Salt Lake City area.

Fident’s marketing efforts produced over ten competitive bids from which the borrower could select. The lack of competitive new apartment supply in the submarket and the area’s strong biotech and biomedical manufacturing presence contributed to a high level of lender interest. Vista’s positioning as one of the more affordable areas of North County has led to very strong multifamily demand and a current 1.6% vacancy rate, trends made even stronger by pandemic-induced migration to the suburbs. In addition to effectively conveying these points, Fident also emphasized the sponsor’s long-standing, successful track record in developing multifamily product within the Greater San Diego region and provided in-depth market research to support the deal’s underwriting assumptions.

The stretch senior construction financing solution of 97%+ LTC allowed the borrower to contribute the land as the primary portion of equity into the project, freeing up capital to pursue other development and investment opportunities. Fident created considerable value in this effort by successfully pushing the lender to attribute significant lift to the project’s land value. This decreased the amount of additional equity that the borrower needed to contribute to capitalize the deal.

The strength of the submarket, opportunity, and sponsor, coupled with Fident’s successful marketing strategy and thoughtful analysis, provided our client with an array of choices for the project’s financing. Show less

Fident Capital secured a $20.7MM construction loan for the development of a 7-story, 94-unit multifamily project with 3,000 SF of ground-floor retail located in the burgeoning North Park submarket of San Diego. A private debt fund provided the non-recourse loan at 75% LTC.

The project offers a mix of studio and one-bedroom units, including five affordable units. Perched upon one of the highest points in San Diego, the upper floors provide ocean views to the Coronado Islands as well as… Show more

Fident Capital secured a $20.7MM construction loan for the development of a 7-story, 94-unit multifamily project with 3,000 SF of ground-floor retail located in the burgeoning North Park submarket of San Diego. A private debt fund provided the non-recourse loan at 75% LTC.

The project offers a mix of studio and one-bedroom units, including five affordable units. Perched upon one of the highest points in San Diego, the upper floors provide ocean views to the Coronado Islands as well as views of Mexico and the San Diego skyline. Residents will enjoy the vibrancy of this North Park location that delivers an array of restaurants, coffee houses, unique shops, and a pedestrian friendly environment.

The client assembled the transaction off-market allowing a lower land basis than marketed land sales. This coupled with minimal parking, which eliminated the high construction costs associated with subterranean development, allow for more affordable rents, and epitomizes intelligent infill development in a highly supply-constrained submarket.

Challenges to the project included explaining the use of Visitor Accommodation units/zoning to increase density, defending the rationale in providing 13 parking spots for 94 units, and navigating the COVID-induced capital markets uncertainty with a non-recourse mandate. Additionally, a late-stage switch in general contractor presented an additional hurdle during close. Show less

Fident Capital secured an $18.8MM non-recourse bridge loan at certificate of occupancy for Ollie, a recently completed 44-unit multifamily project in the North Park neighborhood of San Diego. The financing, at 87%LTC/75%LTV, repaid high-leverage construction debt, dropped the cost of financing, and provides time for the property to stabilize for refinance or sale. The borrower, a repeat Fident client, is an experienced owner-developer who has entitled, built, and sold several residential and… Show more

Fident Capital secured an $18.8MM non-recourse bridge loan at certificate of occupancy for Ollie, a recently completed 44-unit multifamily project in the North Park neighborhood of San Diego. The financing, at 87%LTC/75%LTV, repaid high-leverage construction debt, dropped the cost of financing, and provides time for the property to stabilize for refinance or sale. The borrower, a repeat Fident client, is an experienced owner-developer who has entitled, built, and sold several residential and multifamily projects throughout San Diego. The lender is an east coast-based private debt fund looking to establish a strong West Coast presence.

Delays to the original closing timeline proved challenging, caused by chronic construction labor shortages, supply chain disruptions, and permitting and inspection backlogs at the city. Fident assisted with the management of third-party reports and consultants to keep the loan closing on track, allowing the borrowers to focus their full effort on wrapping up construction. Fident fielded all questions pertaining to the project budget and provided considerable market research to help justify pro forma rents while the project started pre-leasing.

Other challenge to the project included the non-recourse mandate while the project was at 0% occupancy, which limited the competitive lender pool. Additionally, the borrower sought maximum loan proceeds with a minimal prepayment.

Despite the hurdles the project faced, Fident (armed with project-specific knowledge from having placed the original development capital) successfully marketed the borrower’s deep expertise in construction management and cost control, along with the favorable demographics of the rapidly gentrifying North Park submarket, to procure multiple bids for the bridge financing and to arrive at the most advantageous terms possible for our client. Show less

A Fident Capital principal contributed to securing joint venture equity for the acquisition and entitlement of 5 city blocks covering approximately 6 acres in coastal Oceanside, CA. This exceptional coastal infill site was previously owned by the Railroad (who provided some seller carry) and presented considerable entitlement challenges due to the specific plan overlays and California Coastal Commission oversight. Site plans called for 174 residential units, 124 hotel rooms, and 40,000 square… Show more

A Fident Capital principal contributed to securing joint venture equity for the acquisition and entitlement of 5 city blocks covering approximately 6 acres in coastal Oceanside, CA. This exceptional coastal infill site was previously owned by the Railroad (who provided some seller carry) and presented considerable entitlement challenges due to the specific plan overlays and California Coastal Commission oversight. Site plans called for 174 residential units, 124 hotel rooms, and 40,000 square feet of retail.

Financing challenges included understanding and explaining the impact that the California Coastal Commission and Oceanside’s Local Coastal Program would have upon the complex city center zoning for the subject property. Additionally, the long vacant land was in an area with few condominium comparables which made establishing the retail sell out value difficult.

Equity was sourced from a Native American growth fund.
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Fident Capital facilitated the placement of a $7.25MM construction loan and $2.95MM of joint venture equity for the development of a 60-unit multifamily project located in La Mesa, California, a sub-market 15 minutes east of downtown San Diego. The project contains over 43,000 square feet of rentable living space in 41 one-bedroom and 19 two-bedroom units.

Construction financing was provided by a regional bank at 72% loan to cost on a two year term with extensions available. The… Show more

Fident Capital facilitated the placement of a $7.25MM construction loan and $2.95MM of joint venture equity for the development of a 60-unit multifamily project located in La Mesa, California, a sub-market 15 minutes east of downtown San Diego. The project contains over 43,000 square feet of rentable living space in 41 one-bedroom and 19 two-bedroom units.

Construction financing was provided by a regional bank at 72% loan to cost on a two year term with extensions available. The floating rate loan priced at prime plus 1.25% with a floor of 4.50%; a half point fee was paid to the lender at closing. The joint venture equity, sourced through a private raise from high net worth individuals, provided 90% of the required equity in exchange for an 8% preferred return and 50% of project profits.

Challenges to financing included validating pro forma revenue assumptions. Even though the La Mesa market boasts a vacancy rate below 2%, no significant development has occurred near the project for decades. Neither of the market’s two main product types, (1960s vintage B and C class garden-level apartments and newer large-scale class A apartments) are directly comparable to the subject property. Through rent surveys, rigorous analysis, and property tours Fident was able to illuminate the reasonableness of projected rents which are 35% higher than older neighboring properties, yet below class A assets.

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Fident Capital secured Joint Venture Equity for a large-scale REO-to-Rental play focused upon California’s Inland Empire. The platform acquired deeply discounted single-family detached homes through trustee sales and the local multiple listing services.

The project presented a myriad of challenges, which included overcoming institutional equity’s aversion to handing absolute purchase discretion to an operating partner and to wiring cash directly into their account. The operator had a… Show more

Fident Capital secured Joint Venture Equity for a large-scale REO-to-Rental play focused upon California’s Inland Empire. The platform acquired deeply discounted single-family detached homes through trustee sales and the local multiple listing services.

The project presented a myriad of challenges, which included overcoming institutional equity’s aversion to handing absolute purchase discretion to an operating partner and to wiring cash directly into their account. The operator had a strong track record of previous trustee sale investments and defined relatively narrow investment parameters to overcome the investment discretion hurdle. Character references, strong cash management procedures, and incremental funding sufficiently alleviated concerns over placing cash directly within the operator’s control.

Additionally, the investment vehicle supported four equity tranches under a single joint venture operating agreement through which each tranche did not co-mingle with the others, yet the investment as a whole was to perform for the operator as if it was a single $30M investment. This aspect of the deal created legal challenges that all interested parties described as some of the most challenging of their careers.

Financing was provided through a wealth management firm in the Pacific Northwest with an alternative investment arm actively focused upon real estate opportunities. The partner provided 99% of the investment capital in exchange for a 9% preferred return and 65% of the project’s profits. Acquisition, sale, and ongoing management fees were paid to the sponsor. The platform is structured to hold the assets for up to seven years.
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Fident Capital secured a $10M Term Loan for a large-scale REO-to-Rental program focused on California’s Inland Empire.

Challenges included explaining the vibrancy of rentals in the Sponsor’s submarkets and the Sponsor’s operational capacity, developing a master loan agreement, and developing a funding process to allow an advance of loan proceeds following the pledge of each stabilized property into the facility.

The 5 year, $10M loan was provided by a regional bank at a 5.75% rate… Show more

Fident Capital secured a $10M Term Loan for a large-scale REO-to-Rental program focused on California’s Inland Empire.

Challenges included explaining the vibrancy of rentals in the Sponsor’s submarkets and the Sponsor’s operational capacity, developing a master loan agreement, and developing a funding process to allow an advance of loan proceeds following the pledge of each stabilized property into the facility.

The 5 year, $10M loan was provided by a regional bank at a 5.75% rate fixed for three years with a floating maximum rate of 6.25% for the remaining two years. Leverage came at 65% of cost, one point was paid to the lender at closing. The facility had a pre-payment penalty.

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Fident Capital secured $29.0MM of bridge financing on a recently constructed mixed-use property with 52 apartments and ground floor retail. Loan proceeds funded the conversion of a multifamily asset, located only three blocks from the Ocean at the iconic Oceanside pier, into for-sale condos.

The project pivoted to a for-rent strategy upon its completion in response to the Covid-induced spike in rental rates and parallel drop in cap rates. However, as the rental project moved towards… Show more

Fident Capital secured $29.0MM of bridge financing on a recently constructed mixed-use property with 52 apartments and ground floor retail. Loan proceeds funded the conversion of a multifamily asset, located only three blocks from the Ocean at the iconic Oceanside pier, into for-sale condos.

The project pivoted to a for-rent strategy upon its completion in response to the Covid-induced spike in rental rates and parallel drop in cap rates. However, as the rental project moved towards stabilization, the Federal Reserve increased rates by 550 basis point increase, cap rates expanded, and prices for San Diego’s for-sale housing market spiked.

Fident found a bridge lender out of New York who has deep expertise in all aspects residential housing, including conversions, that funded common area refreshes, in-unit upgrades, and created an interest reserve to fund the loan as revenue dropped upon vacating rental units in order to sell them.

Fident’s considerable cash flow analysis, and scrutiny of the lender’s model allowed us to secure a loan which met the requirements of the business plan while mitigating the lender concerns to limit asset exposure until it was clear that the for-sale model had sales traction.

Another deal challenge related to the nature of the mixed-use asset. The building’s wrap design surrounded a parking garage that was bifurcated into private and public uses as part of a Public Private Partnership with the City of Oceanside. Communicating the nuance of easements, access points, and operating responsibilities of the City or HOA required considerable care.

Fident’s marketing efforts provided the required loan proceeds, was cash neutral, and featured a lenient repayment structure that balanced the lender’s requirement to sweep net sales proceeds against the borrower’s need to reserve for tax obligations (from sales). It also allowed for payment of the lender’s exit fee pro rata to sales. Show less

Fident Capital secured a debt facility for acquisition, rehabilitation, and quick resale of single-family homes in California’s Inland Empire. The platform focused upon acquiring deeply discounted detached homes through trustee sales and local multiple listing services.

Challenges included optimizing the debt facility so that collateral could expediently enter the borrowing base to effectively increase the enterprise’s leverage. With collateral moving quickly through the portfolio… Show more

Fident Capital secured a debt facility for acquisition, rehabilitation, and quick resale of single-family homes in California’s Inland Empire. The platform focused upon acquiring deeply discounted detached homes through trustee sales and local multiple listing services.

Challenges included optimizing the debt facility so that collateral could expediently enter the borrowing base to effectively increase the enterprise’s leverage. With collateral moving quickly through the portfolio, the slow pace of appraisal, recordation of trustee’s deeds and deeds of trust hindered the creation of effective portfolio level leverage. Fident Capital developed loan advance procedures in conjunction with the lender that allowed for partial advances upon securing the trustee’s receipt of sale with final advances to 70% LTC upon recordation of the deed of trust. This innovative solution required creation of an intermediate LLC in which the lender had a springing interest; the lender then used this structure to expand their platform and secure considerable new business throughout California.

The facility was provided by a private lender. The borrower paid interest on the outstanding loan balance with the ability to draw and repay funds as needed. The facility carried a 9% interest rate with a 4% annual fee. Leverage was provided at 70% LTC.
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Fident Capital secured a $12MM Joint Venture Equity Line for acquisition, rehabilitation, and quick resale of single-family homes in California’s Inland Empire. The platform focused upon acquiring deeply discounted single-family detached homes through trustee sales and local multiple listing services.
Challenges included structuring the entity and internal cash management procedures to minimize the risk associated with moving large quantities of cashier’s checks to the various Counties’… Show more

Fident Capital secured a $12MM Joint Venture Equity Line for acquisition, rehabilitation, and quick resale of single-family homes in California’s Inland Empire. The platform focused upon acquiring deeply discounted single-family detached homes through trustee sales and local multiple listing services.
Challenges included structuring the entity and internal cash management procedures to minimize the risk associated with moving large quantities of cashier’s checks to the various Counties’ trustee sales.

This entity level investment, provided through a fund-of-funds in the San Francisco Bay area, granted 100% investment discretion to the sponsor and provided 100% leverage in exchange for a 10% preferred return and a 50/50 profit split. The Sponsor earned modest fees on asset sales but no entity-level overhead was paid by the investor. The facility was in place for over three years and purchased in excess of $125MM of product.
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Fident Capital secured financing for this transit-oriented development near downtown San Diego. The project consists of 85 units covering approximately 74,000 sale-able square feet in two buildings above two levels of underground parking. The three- and four-story buildings contain stacked two bed/two bath town homes and single story residences of approximately 900 square feet each.

Project challenges included proving the vibrancy of a San Diego condo project in an increasingly… Show more

Fident Capital secured financing for this transit-oriented development near downtown San Diego. The project consists of 85 units covering approximately 74,000 sale-able square feet in two buildings above two levels of underground parking. The three- and four-story buildings contain stacked two bed/two bath town homes and single story residences of approximately 900 square feet each.

Project challenges included proving the vibrancy of a San Diego condo project in an increasingly conservative lending environment brought about by slowed absorption rates, downward pricing pressure, and increased residential inventory levels. Additionally, the project had been halted due to legal issues outside the control of the sponsor and an expedient close was essential. The sponsor was a foreign national who recently entered into the United States development marketplace and whose assets were primarily outside the United States.

Financing was provided through a national lender with a strong local presence and was placed in front of an existing high leverage mezzanine loan which funded preconstruction and excavation. 30 presales were required prior to close.
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Fident Capital secured $14.5MM of permanent debt in a cash-out refinance of a 190,000 SF industrial park in Visalia, CA. The borrower, a repeat Fident client, is a San Diego-based investor/developer with holdings across the Southwest. The debt was sourced from a regional bank that provided a 7-year fixed-rate term at 65% leverage. The financing paid off the acquisition bridge debt and repatriated over 100% of the borrower’s equity used to acquire the site and develop an additional building on… Show more

Fident Capital secured $14.5MM of permanent debt in a cash-out refinance of a 190,000 SF industrial park in Visalia, CA. The borrower, a repeat Fident client, is a San Diego-based investor/developer with holdings across the Southwest. The debt was sourced from a regional bank that provided a 7-year fixed-rate term at 65% leverage. The financing paid off the acquisition bridge debt and repatriated over 100% of the borrower’s equity used to acquire the site and develop an additional building on the property. Most importantly, the borrower was able to rate lock at sub-5% pricing early in the process.

The primary challenge of the financing was the fact that the asset that was not fully leased at the time Fident went to market. Some lenders hesitated to offer terms because the property was not operating at capacity, or due to a lack of seasoning. Many lenders, and particularly life companies, viewed the financing as less desirable due to the asset’s smaller size and shorter-term leases. Despite this, Fident secured quotes from 13 lenders and helped to sharpen the winning terms in the final offer.

Fident’s market research showcased Visalia’s attractiveness as a burgeoning industrial hub. Recent legislation limits truck drivers time at the wheel, making the haul from areas north of Visalia into key Arizona markets a two-day drive. Fident’s marketing message highlighted this shift in demand and the strong fundamentals of the market, including 3.8% vacancy and 9.3% year-over-year rental rate growth as of Q2 2022. Fident was also able to decipher the project’s complex industrial leases to present the information in a digestible format for lenders.

Top-flight sponsorship, the remarkable operating performance of the subject property itself, and the strong fundamentals of the Visalia industrial market provided for abundant financing choices. Fident exceeded the client's expectations by securing $2MM more loan proceeds than the client’s original ask. Show less

Fident Capital secured $9.9MM (41% LTV) of permanent financing for a 16-unit multifamily asset with 4,500 SF of ground floor retail in the Pacific Beach area of San Diego, CA. The lender, a regional bank headquartered in Los Angeles, provided 7-year fixed-rate debt priced in the mid-5% range with three years of interest-only payments.

Maximizing loan proceeds proved the biggest challenge of the deal. Several factors constrained the property’s underwritten net operating income, including… Show more

Fident Capital secured $9.9MM (41% LTV) of permanent financing for a 16-unit multifamily asset with 4,500 SF of ground floor retail in the Pacific Beach area of San Diego, CA. The lender, a regional bank headquartered in Los Angeles, provided 7-year fixed-rate debt priced in the mid-5% range with three years of interest-only payments.

Maximizing loan proceeds proved the biggest challenge of the deal. Several factors constrained the property’s underwritten net operating income, including fluctuating historical monthly operating expenses. Fident helped alleviate operating expense concerns by drilling into the property’s historicals to justify monthly fluctuations as one-time charges, or lags in billing from utility/sub-metering vendors.

A portion of the commercial space, which was leased but not yet occupied, was undergoing capital improvements, which further complicated the marketing effort. Many lenders couldn’t hit full proceeds because they wouldn’t recognize the revenue expected from that space. Fident sourced a loan with an earnout that funded when the new lease started paying. This structure allowed the borrower to secure a majority of the loan proceeds upfront, and the early close saved considerable expense in a rapidly escalating rate environment. Fident also negotiated a 75-day rate lock with other attractive terms such as a flexible prepay and minimal lender fees.

Despite the deal’s complexity, the quality real estate attracted several competitive quotes. The asset is located on a prominent thoroughfare one block from the Pacific Ocean, and is accessible to a myriad of dining, retail, and recreational options around Pacific Beach and Mission Bay. Each of the 16 residential units has a unique multi-level design with a private entrance, which brings in premium rents in an area dominated by heavily dated product. The recapitalization allowed the client to reduce his monthly debt service and repatriate the majority of his equity before rates escalated. Show less

Fident Capital secured the construction loan and joint venture equity for the development of a 13-story, 40,000 square foot, high-rise office condominium on a 5,000 square foot parcel. The developed property was to offer a full floor retail and office condominiums.

A regional bank funded the construction facility at 80% of cost on a 24-month term with no presale requirement.

The joint venture equity partner’s $2.5M investment represented 60% of the required equity capital with the… Show more

Fident Capital secured the construction loan and joint venture equity for the development of a 13-story, 40,000 square foot, high-rise office condominium on a 5,000 square foot parcel. The developed property was to offer a full floor retail and office condominiums.

A regional bank funded the construction facility at 80% of cost on a 24-month term with no presale requirement.

The joint venture equity partner’s $2.5M investment represented 60% of the required equity capital with the sponsor providing the remaining 40%. Fident Capital negotiated a deal structure that provided the equity partner a 10% preferred return on its invested capital plus 66% of project profits.

The equity investor required four presales prior to funding.
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Fident Capital secured $6.6MM of Joint Venture Equity for the off-market acquisition of a non-performing note. The loan, secured by over 50 acres of land in the Spring Valley submarket of San Diego County, held a $41MM unpaid balance.

The borrower defaulted several years ago, but foreclosure stalled with a 2011 bankruptcy filing of the original lender. A nation bank, the finance provider to the original lender, acquired the note as part of the bankruptcy proceedings.

The Sponsor… Show more

Fident Capital secured $6.6MM of Joint Venture Equity for the off-market acquisition of a non-performing note. The loan, secured by over 50 acres of land in the Spring Valley submarket of San Diego County, held a $41MM unpaid balance.

The borrower defaulted several years ago, but foreclosure stalled with a 2011 bankruptcy filing of the original lender. A nation bank, the finance provider to the original lender, acquired the note as part of the bankruptcy proceedings.

The Sponsor seeks to foreclose upon the property. After gaining fee title, the Sponsor will sell a portion of the site, already entitled for residential use, thereby recapturing about 80% of the project’s required equity. The remainder of the site will likely be re-entitled from primarily commercial uses into residential lots, providing substantial upside.

Fident Capital identified an opportunistic equity partner specialized in distressed situations who has purchased over $1.3B in assets since 2008, primarily in non-performing and sub-performing notes. The equity partner provided 95% of the equity. The Sponsor, in addition to acquisition and management fees, earns a 24% profit split above a 10% preferred return and 43% profit split above a 20% IRR.

The project faced considerable challenges. First was the need for speed. The bank executed another contract keeping the Sponsor’s offer in second position as a fallback. After nearly a year-long sales process the Sponsor was required to conduct all due diligence parallel to the other buyer, hoping they would step away. When they did, only 1 week was allowed to complete the closing, which included execution of a joint venture operating agreement.

Additional challenges included a litigious borrower and complex entitlements. Due diligence uncovered more significant site constraints than originally anticipated. However, through research, creative planning, and the Sponsor’s entitlement experience all parties gained comfortable with the risks of the project. Show less

Fident Capital secured $17.4MM of equity for the acquisition and development of a 209-unit multifamily project within the Three Springs master plan of Durango, Colorado. The $64MM venture will bring much-needed market-rate product to this sub-3% vacancy market.

This financing presented several challenges. First, the client’s balance sheet was not a sufficient counterweight for a $64MM project. Both a 10% equity co-invest and the lender requirements for net worth and liquidity on a $38MM… Show more

Fident Capital secured $17.4MM of equity for the acquisition and development of a 209-unit multifamily project within the Three Springs master plan of Durango, Colorado. The $64MM venture will bring much-needed market-rate product to this sub-3% vacancy market.

This financing presented several challenges. First, the client’s balance sheet was not a sufficient counterweight for a $64MM project. Both a 10% equity co-invest and the lender requirements for net worth and liquidity on a $38MM loan were obstacles for a traditional capitalization. As a result, Fident sought either an LP partner willing to provide credit enhancement or fee development scenarios. Additionally, tertiary markets are notoriously difficult to capitalize with institutional capital. Investors’ concerns about the depth of the market’s buyer pool for the stabilized asset make them worry about being “stuck with the asset” for an unknowable amount of time. Vibrant data with which to validate underwriting assumptions were also scarce with few good comparables and reliable 3 rd party consulting resources. A first person, boots on the ground, underwrite was required. Finally, the developer was coming into the Durango market for the first time. He assembled a strong team of consultants to support the project but could not point to prior developments in the area, or with the team.

Fident was able to source “operator equity” (a term we use for JV equity that can affect a business plan without a third-party developer) who made an honest and deep investigation of the Durango market. They looked beyond the limitations of the scenario and saw a vibrant development opportunity.

Interests were aligned through the provision of development fees paid, milestone incentive payments, and simple, clean profit participation. Development is slated to begin in May 2022. Show less

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… Show more

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. Show less