Office to Multifamily
December 10, 2022
Central Coast Project Targets Local Workforce Housing Demand; Hybrid Construction Loan with Permanent Option Showcases Lender Flexibility for Experienced Developers and Quality Projects
Monterey, Calif. – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $14.3 million of construction financing for the adaptive reuse of a suburban office property as workforce, multifamily housing. The project is located at 2300 Garden Rd. in the city of Monterey, Calif., and will be redeveloped to provide 64 one- and two-bedroom market rate units on a 7.23-acre site.
A Gantry team of Robert Slatt, Principal, Jeff Wilcox, Principal, and Andrew Ferguson, Associate, with the firm’s San Francisco office represented the borrower, an experienced local developer. The three-year construction loan was secured through one of Gantry’s correspondent life company lenders at an attractive rate in the current market cycle, and allows for transitioning the loan to an extended, permanent term at the same rate upon completion of construction.
According to Gantry’s Robert Slatt, “Our client is an experienced developer in the Monterey community who has identified an underserved demographic of renters. Construction financing for new multifamily development is readily available from our correspondent lenders when a sponsor can demonstrate a project’s relevant market fundamentals, budget accordingly, and offer a demonstrated track record of past project completions. The loan is structured as a traditional three-year construction loan with the option of extending its term to permanent status upon maturity or refinancing into a new loan if rates have improved by that time. This flexibility allows our client to move forward in confidence that the project, as underwritten, will deliver into predictable financial circumstances for a legacy hold if desired upon completion.”