$2.6M Land Bridge: Morgan Hill Residential Entitlement

The Borrower's Problem

The parcel is the second phase of a 9-acre site. The first phase, 42 homes, was completed in 2018. The second phase sat on hold while the regional water district finished flood improvements along Little Llagas Creek, completed in December 2025.

The owner had about $2.3 million of debt on the land and an executed letter of intent from a national homebuilder to buy the site for $11 million after entitlement. Entitlement was expected to take about 18 months. Banks rarely lend on unentitled land with no income.

The Helvetica Solution

Helvetica funded a $2.6 million first-mortgage bridge on the 3.42-acre parcel, zoned for 6 to 16 homes per acre. The 24-month, interest-only term covers the expected 18-month entitlement process with room to spare.

The loan basis is about $760,000 per acre. Recent Morgan Hill land sales for detached single-family product have exceeded $3.4 million per acre.

Benefit to the Borrower

• About $2.3 million of existing debt retired
• 24 months of runway to complete entitlement
• Interest-only payments while the land produces no income
• The site stays on track for its contracted $11 million sale

Deal Highlights

• $2,600,000 first-mortgage land bridge
• Roughly 25% LTV; the brochure reports 25% against $11 million and 26% against a $10 million valuation
• 3.42 acres, plans for 36 detached single-family homes
• Sponsor track record of 29 investments totaling 4,155 homes
• Planned exit: sale of the entitled parcel to a national homebuilder for $11 million