$37.4M Non Recourse Construction Loan | Office-to-Residential Redevelopment
Adaptive Reuse Execution • Ohio TIF Integration • Mini-Perm Stability
Non recourse construction loan overview
Non recourse construction loan financing engineered for institutional-scale adaptive reuse. A private real estate investment group sought a non recourse construction loan to convert an entire office complex into newly developed multifamily apartments. Cornovus Capital arranged a $37.4 million non-recourse construction execution through a national debt fund, structured to maximize leverage, align with redevelopment phasing, and support a controlled runway through lease-up and stabilization.
This transaction required disciplined structuring across acquisition and construction, coordinated public incentive timing, and lender mechanics capable of absorbing real-world conversion risk—zoning, design, infrastructure modernization, and staged absorption—without forcing a premature takeout.
By integrating municipal support, underwriting conversion risk, and negotiating reserve and Mini-Perm terms consistent with debt fund execution, Cornovus Capital delivered a capital structure designed for certainty of closing and stability into permanent financing readiness.
Challenge
- Structural & zoning adaptation: major building modifications, code compliance, and approvals required for full residential conversion.
- Ohio TIF integration: coordinating municipal incentive timing with construction draws and lender reporting requirements.
- Risk mitigation & stakeholder alignment: aligning lender, municipality, and sponsor milestones to avoid timing gaps.
- Lease-up and absorption runway: financing needed to support staged lease-up and stabilization without pressuring cash flow.
- Exit strategy certainty: borrower required Mini-Perm stability and flexibility for refinance or sale post-stabilization.
Solution
The capital stack was structured to support conversion scope, lease-up staging, and a Mini-Perm transition designed to reduce refinance pressure at completion. For context on the municipal incentive framework used, see the Ohio Tax Increment Financing (TIF) program overview.
- Loan amount: $37.4 million
- Loan type: non-recourse construction financing (debt fund execution)
- Interest structure: competitive market pricing with Mini-Perm transition mechanics
- Leverage profile: high loan-to-cost execution preserving sponsor equity
- Reserves: structured reserves for operating support and lease-up execution
- Capital stack: integrated Ohio TIF funding to optimize overall financing efficiency
- Exit strategy: refinance or sale upon stabilization, aligned with long-term investment horizon
Results
- Efficient financing execution: fully structured construction financing with coordinated stakeholder alignment and draw mechanics.
- Multifamily expansion: 146 newly converted apartment units delivered through adaptive reuse.
- Stabilization-ready structure: Mini-Perm transition created runway prior to permanent refinancing.
- Market repositioning: office complex repositioned into a competitive, high-density residential community.
Related Capital Programs
Explore additional financing programs for redevelopment, transitional assets, and long-term takeout: Bridge program, CMBS program, LifeCo program, Multifamily program, Conventional financing, SBA 7(a), and SBA 504.
About Cornovus Capital
With over 70 years of combined experience, Cornovus Capital is a trusted financial partner specializing in business financing, commercial real estate lending, and hospitality funding solutions. We design customized capital strategies that help businesses acquire, expand, and optimize operations, ensuring long-term growth and financial stability across multiple market cycles.
Our expertise spans CMBS and LifeCo financing, private capital solutions, structured debt strategies, SBA 7(a) and 504 loans. By focusing on certainty of execution, disciplined underwriting, and closing assurance, we guide businesses and investors through complex capital markets environments, securing financing aligned with long-term ownership and investment objectives.
For insight into the broader interest rate and monetary policy environment influencing commercial real estate financing, visit the Federal Reserve’s Monetary Policy resources.
Connect with Cornovus Capital
Exploring financing options for commercial real estate or business finance? Cornovus Capital delivers institutional execution — combining underwriting precision, credit modeling, and lender coordination to ensure transparency, speed, and certainty from term sheet to closing. Cornovus Capital delivers structured solutions, execution precision, and efficiency from application to closing.
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