Construction Financing for Development Sites
Quick answer
Kismet Kapital structures construction financing for development sites at 55–65% LTC, typically closing in 60–120 days. Lender focus on sponsor track record, GC strength, fixed-price contracts, contingencies, and exit underwriting.
- Product
- Construction Financing
- Asset Class
- Development
- Typical Leverage
- 55–65% LTC
- Typical Close
- 60–120 days
- Term
- 24–48 months (plus mini-perm options)
- Recourse
- Recourse to full or burn-down
Overview
Ground-up development capital is the most structured area of CRE finance — combining senior construction debt, mezzanine, preferred equity, and JV equity. Construction loans fund vertical and horizontal development on a draw basis, typically capitalized alongside mezzanine debt, preferred equity, or JV equity to reach the sponsor's target leverage. For development sites, construction proceeds are sized against lender focus on sponsor track record, gc strength, fixed-price contracts, contingencies, and exit underwriting. sub-debt and preferred equity routinely fill the gap between senior ltc and sponsor co-invest.
Why sponsors use Kismet Kapital for development construction capital
development transactions are typically capitalized with Construction, Mezzanine, Preferred Equity, JV Equity. Kismet Kapital identifies which of those structures the current lender market will actually fund for your business plan, then runs a competitive process across the desks pricing development risk today.
Terms at a glance
- 55–65% LTC typical proceeds for construction on development sites.
- Executions generally close in 60–120 days.
- Draw-based funding with completion guarantees and contingency requirements.
- Common structures: Construction, Mezzanine, Preferred Equity, JV Equity.
- Ground-up multifamily and BTR
- Last-mile and distribution industrial
Key facts
Kismet Kapital typically closes construction financing on development sites in 60–120 days.
Construction Financing for development sites generally size to 55–65% LTC.
Development capital stacks commonly include Construction, Mezzanine, Preferred Equity, JV Equity.
Frequently asked questions
What leverage is available on construction financing for development sites?
Construction Financing for development sites typically size to 55–65% LTC, with the exact proceeds driven by in-place income, business plan, and sponsor experience.
How long does a construction loan on development take to close?
Most development construction executions close in 60–120 days from signed term sheet.
How do lenders underwrite development sites?
Lender focus on sponsor track record, GC strength, fixed-price contracts, contingencies, and exit underwriting. Sub-debt and preferred equity routinely fill the gap between senior LTC and sponsor co-invest.
What capital structures work best for development sites?
Development Sites are typically capitalized with Construction, Mezzanine, Preferred Equity, JV Equity. Kismet Kapital engineers the mix that maximizes proceeds without breaking the business plan.
When is construction the right product for an development deal?
Senior construction debt for ground-up development across multifamily, industrial, mixed-use, and hospitality. It fits development transactions such as ground-up multifamily and btr and last-mile and distribution industrial.
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