$84M Sun Belt Multifamily Development

An experienced multifamily developer had a fully entitled 312-unit Class A site in a high-growth Sun Belt submarket with a defensible cost basis, but the senior construction lenders the sponsor had previously worked with were sized out at 62% loan-to-cost given regional bank balance sheet constraints.

To preserve the sponsor's targeted equity multiple and IRR, the project needed approximately 78% loan-to-cost total leverage, meaningfully higher than any single senior would deliver.

VS Capital Group ran a parallel process across a curated set of construction debt funds and balance-sheet lenders, ultimately securing a 67% loan-to-cost senior with a debt fund that underwrote the project's cost basis and submarket rent comps with appropriate aggression.

We layered $12M of mezzanine debt behind the senior, placed with a dedicated mezzanine platform, to bring total leverage to 78% loan-to-cost without requiring incremental sponsor equity.

The intercreditor agreement, completion guaranty, and draw mechanics were negotiated to align with the GMP contract and the project's 26-month construction schedule.

Closed in 96 days from term sheet acceptance with the full capital stack, senior, mezzanine, and sponsor equity, funded simultaneously.

Sponsor preserved a target 1.7x equity multiple and 22% IRR on the deal compared to a 1.4x and 16% IRR scenario at 62% LTC senior-only leverage.

Project is currently under construction on schedule with first units expected to deliver on the original underwritten timeline.