$4.9M Construction Completion Bridge: Holman Building Condos

The Borrower's Problem

The borrowing entity — an experienced real estate LLC — had recently completed a substantial renovation of the historic Holman Building, a five-story landmark on Lighthouse Avenue in downtown Pacific Grove. The project converted the former department store into 27 luxury residential condos, 3 office condos, and 12 retail condos, with a full structural upgrade, new MEP systems, earthquake retrofit, new fire and life-safety systems, basement parking, and a fifth-floor rooftop addition creating four ocean-view penthouses.

With construction substantially complete and a majority of units already sold, the remaining construction loan balance was coming due. At the same time, several units still needed final improvements before they could close to buyers, and outstanding contractor advances needed to be paid. Conventional bank financing was not a fit: the collateral was a pool of individual condo units, some still vacant or in shell condition, with sales in progress rather than stabilized income.

The Helvetica Solution

Helvetica underwrote to the completed value of the collateral and the clear exit strategy — unit sales — rather than to operating income. A $4,900,000 first mortgage was structured against a collateral value in excess of $25 million, resulting in a conservative 19% loan-to-value. The loan was secured by a senior position on 10 luxury residential condo units and a junior position on 2 additional units.

Proceeds retired the maturing construction loan, paid outstanding contractor advances, and freed capital to complete the remaining penthouse units so they could be brought to market. The loan was written interest-only over 24 months, giving the borrower a comfortable runway to finish and sell units without a lender-imposed construction completion deadline.

Benefit to the Borrower

• Maturing construction loan retired before it became a default
• Outstanding contractor-partner advances paid, preserving the relationship
• Capital released to complete the remaining penthouse units to sale-ready condition
• 24-month interest-only term matched to the unit-sales exit timeline
• Underwritten to completed collateral value, not current cash flow
• Massive equity cushion preserved — roughly $20M+ of value behind a 19% LTV loan

Deal Highlights

• Historic mixed-use conversion in a premier Monterey Peninsula location
• 12 luxury residential condo units collateralizing the loan
• Construction completion and cash-out refinance
• Repeat borrower with strong track record and personal guarantee support
• Exit via sale of remaining condo units