Inner Circle Capital arranged bank and CPACE financing for a 168-unit multifamily development project in Denver, CO.

Project Overview:

Sponsors are developing market rate multifamily in an opportunity zone in Denver. The project has hard costs of $37.33 million; soft costs of $1.63 million; and land related costs of $4 million (total of $42.96 million). The land was purchased in 2022 and has seen some improvement in value through rezoning and entitlements. The lenders were able to utilize the increased value of the land as part of the equity stack in the deal. Lenders also included the interest and closing costs as part of the total cost of the project, allowing for a 83.23% LTC on the deal.

The deal structure allows the sponsors to develop the property (projected timeline of 21 months), lease the property (projected timeline of 6 months), and refinance the property (projected timeline of 3 months) while still holding interest reserves for an additional 6 months. This reduces the timing stress on the sponsors.

This was the sponsor’s first development project in Colorado. The equity was raised through a syndication.

Bank Terms:

• Loan Amount: $25,000,000
• Term: 3 Years; Full Term I/O
• Rate: Floating at Prime + 0.25% (7.75% at close)
• Completion Guarantee
• Allowed for land lift to count towards the equity component in the deal
• No Prepayment Penalty

CPACE Terms:

• Loan Amount: $15,000,000
• Term: 3 years I/O and then 25-year amortizing loan (28 total years)
• Rate: Fixed at 8.40%
• Non-Recourse and Assumable
• 3 Years interest capitalized in the loan

Capital Advisor: Jaideep Chadha