$15M Ground-Up Multifamily Construction Denver | Commercial Lending Solutions 
Loan Size Example

$15 Million Ground-Up Multifamily Construction in Denver

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $15 million ground-up multifamily construction loan in Denver represents a mid-market opportunity that typically funds 150 to 250 unit apartment communities in submarkets like RiNo, Baker, or South Denver. At this size, Denver sponsors can access regional bank construction programs and agency permanent take-out commitments, with leverage running 65 to 75 percent LTC on construction and 70 to 80 percent LTV on the stabilized permanent loan. Rates for ground-up construction typically float at SOFR plus 275 to 325 basis points during construction, with permanent financing locked at 8.00 to 8.50 percent depending on stabilized DSCR and sponsor credit.

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Capital Stack

What a $15M Ground-Up Multifamily Construction Capital Stack Looks Like

At the $15 million tier, Denver sponsors typically layer a construction facility from a regional bank or credit union with an agency permanent commitment or life company loan, often paired with 20 to 35 percent equity. The construction lender drives the deal timeline and construction covenant package, while the permanent lender's take-out commitment de-risks the sponsor's carry and refinance risk. Lender selection hinges on construction experience in Denver's competitive submarket, permanent rate certainty, and sponsor balance sheet strength.

Capital Source Rate / Cost Size / LTV Notes
Regional bank or credit union SOFR plus 275 to 325 basis points floating $12M to $13.5M construction facility; 65 to 75 percent LTC Leads construction underwriting and monitoring; requires completion guarantee and comprehensive insurance package; typical 24 to 30 month construction period with step-downs on occupancy; recourse to sponsor and guarantor
Agency DUS program or Freddie Mac standard 8.00 to 8.50 percent fixed 10-year amortization $12M to $13.5M permanent commitment; 70 to 80 percent LTV stabilized Locked at loan origination or floating takeout rate until closing; 24 to 36 month rate lock; requires stabilization proof (90 percent occupancy) and final appraisal; non-recourse or limited recourse
Life company or balance sheet lender 8.25 to 8.75 percent fixed 10-year amortization $12M to $14.5M permanent; 70 to 75 percent LTV Alternative if sponsor misses agency box; longer underwriting timeline but more flexible on rent growth assumptions and submarket; preferred by sponsors seeking recourse-light terms and higher leverage
Sponsor equity 20 to 35 percent of total project cost $4M to $7M minimum equity check; held in reserve or deployed at stabilization Preferred equity or common equity; required for lender appetite; strong sponsors retain cash reserves post-close for lease-up contingencies

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $15M Ground-Up Multifamily Construction Deal

The typical $15 million ground-up multifamily sponsor in Denver has 10 to 20 years of development experience, $50 million to $250 million in combined net worth, and a track record of 5 to 15 completed multifamily projects. Most sponsors are experienced operators seeking infill opportunities in Denver's supply-constrained central neighborhoods, where land basis and entitlements can be secured for $3 million to $6 million, and construction costs run $150,000 to $200,000 per unit. These sponsors often combine ground-up construction with buy-and-hold or 5 to 7 year exit strategies, targeting market-rate or mixed-income product aligned with Denver's demographic demand.

From the CLS CRE Pipeline

A Real $15M Example

CLS CRE closed a $14.2 million ground-up construction and permanent financing for a 185-unit garden-style apartment community in southeast Denver in 2024. The sponsor was an established local developer with three prior deliveries; construction was funded by a regional bank at SOFR plus 295 basis points with a 28-month draw schedule, and permanent financing was locked through an agency program at 8.15 percent on a 75 percent LTV basis with a 10-year amortization. The sponsor maintained $4.5 million in equity (31 percent of total project cost) and hit stabilization at 93 percent occupancy and a 1.35x DSCR in month 26, triggering permanent loan close-out at rates locked 18 months prior. The project delivered at $164,000 per unit all-in, with average rents of $1,695 per unit, generating strong investor returns and a clear path to a hold or partial disposition within the sponsor's 7-year investment horizon.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$15M Ground-Up Multifamily Construction Denver FAQ

All-in costs for ground-up multifamily in Denver typically range from $145,000 to $210,000 per unit depending on location, amenity level, and unit count. Projects in supply-constrained central submarkets (RiNo, Five Points, South Pearl Street) run higher due to land basis and entitlements, while suburban infill can achieve lower per-unit costs. The $15 million loan size usually backs 150 to 250 unit projects with total project costs of $19 million to $25 million including land, hard costs, soft costs, and contingency.
Ground-up multifamily construction in Denver typically runs 24 to 30 months from commencement to substantial completion, depending on unit count, weather delays, and labor availability. The permanent lender funds upon stabilization (typically 90 percent occupancy, minimum 30 to 60 days of operating history) and satisfaction of all loan conditions, which may occur in months 26 to 36 depending on the local market's lease-up velocity. Sponsors should plan for 2 to 4 months of post-construction rent-up before permanent loan close, and lenders require a final appraisal and leasing verification from an independent third party.
Agency lenders typically underwrite to a 1.20 to 1.40x DSCR depending on submarket and sponsor credit; Denver market-rate projects with strong sponsorship often achieve 1.35x to 1.50x. Life companies and balance sheet lenders may accept lower DSCR (1.15 to 1.25x) for experienced sponsors with strong reserves and guarantee packages. Sponsors should assume a stabilized NOI based on conservative rent and occupancy assumptions; local rent comps and market absorption studies drive lender confidence in the underwriting.
Most sponsors lock a permanent rate commitment at construction loan origination through an agency or life company, typically with a 24 to 36 month rate lock that covers the construction and initial stabilization period. This rate lock protects the sponsor from rising market rates during construction; if market rates fall, the sponsor has the option to refinance at permanent close-out. Some lenders offer floating construction funding (SOFR-based) coupled with a fixed permanent rate, giving the sponsor certainty on the back-end while managing near-term funding costs.
Construction lenders require full recourse to the sponsor and a completion guarantee from either the sponsor or a third-party surety (completion bond). Most lenders require cash reserves of 5 to 10 percent of construction costs to cover contingency and cost overruns, held in a lockbox account. The permanent lender typically takes a non-recourse or limited recourse position upon stabilization, though some lenders require a 5 to 10 year personal guarantee from the sponsor or major partners based on balance sheet strength and prior development track record.


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