Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $108.3 million in structured debt to retire maturing construction financing for the Ventana Residences, a 193-unit, Class A multifamily community located at 99 Ocean Avenue in San Francisco’s Outer Mission neighborhood.
Gantry’s Jeff Wilcox, Principal, and Andrew Ferguson, Associate, with the firm’s San Francisco production office represented Ventana’s developer, Presidio Bay Ventures. Financing for the new debt structure included two loans, successfully placed with separate lenders all while navigating the volatile rate climate of Q4 2024.
“We faced a number of hurdles finalizing this financing structure, not least of which was rate volatility in a market with a much higher cost of capital than when we started the assignment,” said Jeff Wilcox, Principal, Gantry. “A successful lease-up and attentive management by Presidio Bay Ventures stabilized the property with the necessary debt service capacity, but rate volatility pressured the CMBS first note after we went under application. The commitment of a vested junior equity financing partner offset these challenges and saved the day.”
The 10-year first position loan was provided by one of Gantry’s CMBS lending sources, featuring full term interest only and non-recourse terms. Mezzanine debt was provided by an institutional investment manager for a parallel 10-year term, structured with advantageous terms to accommodate the long-time horizon.
“Creative underwriting does not mean loose underwriting,” emphasized Wilcox. “By working closely with both the first and mezzanine lenders with diligence and a committed response to navigate impacts from a rapidly rising rate climate, we were able to develop a creative structure to meet the asset’s permanent needs at a cost in-line with project revenues and investor return goals, a win-win for both PBV and the lenders.”
Presidio Bay acquired the 99 Ocean site in 2016 and successfully obtained entitlements for almost triple the original density allowable through the HOME-SF program focused on delivering more affordable housing in a supply constrained market. Ventana commenced development with a construction loan and preferred equity placement structured by Gantry in 2021. The project was completed in early 2024 and stabilized with strong performance, exceeding its original underwritten proforma.
