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Construction financing for middle market luxury apartment community
The Challenge
Sponsor needed 70% LTC construction financing for a 342-unit waterfront development in Miami with a compressed 24-month delivery schedule. Rising insurance costs in South Florida and a softer rent-growth outlook made regional banks reluctant to stretch beyond 60% LTC without recourse.
The Structure
A senior construction loan from a life company (62% LTC, non-recourse) paired with a mezzanine tranche from a debt fund to reach 70% LTC. Interest reserve sized through stabilization plus six months. Completion guaranty on the GC, not the sponsor.
The Outcome
Closed in 47 days from term sheet execution. Sponsor retained ~$12M of equity compared to a senior-only execution and avoided recourse entirely. Project broke ground on schedule.
Deal Mechanics
70% LTC non-recourse construction capital
Dual-tranche senior + mezzanine execution
Completion guaranty placed at GC level, not sponsor
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