$9 Million Ground-Up Multifamily Construction in Los Angeles

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $9 million ground-up multifamily construction loan in Los Angeles typically finances a 25 to 45 unit small-to-mid market-rate multifamily project at total project cost of $14M to $20M. LA ground-up faces specific regulatory constraints (AB 2011, Measure ULA, soft story, AB 1482) that affect entitlement and financing.

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What a $9M Ground-Up Multifamily Construction Capital Stack Looks Like

$9M LA ground-up multifamily construction stacks combine senior construction debt with institutional or family office equity.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund SOFR + 450 to 650 $9M / 65 to 75% LTC Construction + lease-up; non-recourse
Bank balance sheet SOFR + 300 to 425 $9M / 60 to 65% LTC Sponsor recourse
Agency forward commitment 5.85 to 6.30% fixed (locked) $9M / 70 to 75% LTV stab Permanent take-out lock
Institutional equity Equity (target IRR 18 to 25%) $3M to $5M LA-focused multifamily equity

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

Who Closes a $9M Ground-Up Multifamily Construction Deal

Typical $9M LA ground-up sponsors are LA-focused multifamily developers with prior completed projects. Sponsor net worth typically $5M to $20M.

A Real $9M Example

On a $9.5M ground-up 32-unit market-rate multifamily construction in a Mid-Wilshire LA submarket, the sponsor was an LA developer with 3 prior projects. Construction debt at SOFR + 525 (10 percent all-in), 70 percent LTC ($6.7M), with Fannie Mae forward commitment at 5.95 percent for permanent.

Anonymized. All deal references protect borrower and lender identity.

$9M Ground-Up Multifamily LA FAQ

AB 2011 is California state law providing streamlined ministerial approval for housing development on commercially-zoned parcels statewide.
Measure ULA is a 4 to 5.5 percent transfer tax on LA city sales above $5M, paid by seller at exit. ULA does not apply to construction or refinance.
Soft story retrofit applies to existing pre-1978 buildings with vulnerable first floors, not new construction. New ground-up complies with current LA building code.

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