$2.5M Preferred Equity: Ocean-View Residential Development in Cardiff

The Seller's Problem

The parcels came to market through an estate sale after four decades of family ownership. One of the three lots was improved with an aging structure — a converted water tower used as a single-family residence — which complicated a conventional listing: buyers wanting a finished home were not buyers of a development site, and developers wanted certainty on entitlement risk before committing. The estate needed a clean, quiet sale to a buyer who could underwrite the land rather than the improvement.

The Helvetica Solution

Helvetica underwrote the site on its land fundamentals: a three-lot corner assemblage at the top of the hill in one of coastal San Diego County's most supply-constrained beach communities, walking distance to the sand and to downtown Cardiff, in a market where new-construction product is scarce. A single-purpose acquisition entity closed the purchase at $2,300,000, with design, plans, permits and entitlement costs funded from the preferred-equity commitment.

The development program removes the obsolete structure and delivers five residences across three approximately 5,000 SF lots: two twin-home buildings providing four units at 1,937+ SF each, and a 3,741 SF single-family residence anchoring the corner. Four of the five homes have roof decks and all capture panoramic ocean views. Every design includes partially subterranean space — garages entering below grade from the alley, walk-out lower patios, and downstairs bonus rooms configured to function as separate rental units. Approved plans total 11,597 SF, with roughly 12,400 SF of marketable living area once decks and outdoor living are counted.

Three years of design work and negotiation with the City of Encinitas maximized marketable square footage and view corridors. With design, plans, permits and hold costs fully funded, the project was delivered shovel-ready at the grading permit. Rather than carry the construction risk itself, Helvetica exited by selling the fully entitled development to a local contractor well positioned to take it vertical.

Why It Worked

• Off-market access through relationships, with no competitive bidding process
• Land-basis underwriting rather than reliance on the existing improvement
• Entitlement and design capital committed up front to de-risk the build
• Twin homes offer a more affordable entry point; the single-family home sets the tone for the corner
• Scarcity of new-construction inventory in a proven coastal submarket
• Exit at shovel-ready, with entitlement risk removed and value crystallized in the sale to a local builder

Deal Highlights

• Three adjacent infill lots of roughly 5,000 SF each, acquired at $2,300,000
• Five approved homes: four twin-home units at 1,937+ SF plus a 3,741 SF single-family residence
• 11,597 SF of approved area; approximately 12,400 SF of marketable living area
• Roof decks on four of five homes, panoramic ocean views, subterranean garages and lower-level bonus rooms
• Plans approved by the City of Encinitas; deliverable shovel-ready at the grading permit
• The only five-unit ocean-view subdivision in Cardiff
• Shovel-ready development sold to a local contractor to execute construction