Riverwards Group closed $35.8 million in nonrecourse construction financing to build Somerset Phase II, a 170-unit multifamily development in the Port Richmond neighborhood of Philadelphia, Commercial Observer reported. The capital stack pairs a $19.9 million senior construction loan from Silver Heights Capital with $15.9 million of Commercial Property Assessed Clean Energy debt from Nuveen Green Capital. Riverwards Group is contributing $10 million in sponsor equity to the project.
The 146,158-square-foot development represents the next stage of the Somerset Station master-planned community near the Delaware River. The site at 2202 East Somerset Street previously saw the completion of a 220-unit first phase, which Riverwards Group sold to the Philadelphia Housing Authority in May 2025 for $58.1 million. Urban Renewal Builders will serve as general contractor for Phase II, with construction aimed at an early 2028 delivery.
Capital stack and project details
D2 Capital Advisors arranged the transaction with a team led by Jack Cortese and David Frankel. The financing combined senior debt with C-PACE financing to maximize proceeds and lower the borrower overall cost of capital. According to D2 Capital Advisors, Philadelphia issued its fewest residential building permits in 11 years in 2024, resulting in a lower supply pipeline ahead of Somerset Phase II.
The planned building includes 76 studios, 38 one-bedroom apartments, and 56 two-bedroom floor plans, along with on-site garage parking. It also carries a grandfathered 10-year, 100 percent real estate tax abatement. Prior site work completed during Phase I positioned the property for vertical construction to begin quickly.
What it changes for a closing
Closings that integrate C-PACE debt alongside conventional senior construction debt require coordination around lien priority, payment waterfalls, and disbursement controls. Because Nuveen Green Capital provided $15.9 million in C-PACE debt alongside a $19.9 million senior loan from Silver Heights Capital, closing counsel and title officers had to align construction draw schedules and assessment terms between two institutional credit providers.
The structure also relied on crediting site work completed under Phase I and addressing tax incentives. Closing teams had to document the grandfathered 10-year, 100 percent real estate tax abatement, satisfy nonrecourse debt requirements, and verify the $10 million sponsor equity commitment ahead of vertical funding.