D2 Capital Advisors arranged and closed a $35.83 million construction financing package for Somerset Phase II, a 170-unit multifamily development at 2202 E. Somerset Street in Philadelphia’s Port Richmond neighborhood.
The project is the next phase of Riverwards Group’s Somerset Station master plan.
The financing package includes a $19.87 million senior construction loan from Silver Heights Capital and $15.96 million in Commercial Property Assessed Clean Energy financing from Nuveen Green Capital.
D2 Capital Advisors arranged both tranches on behalf of Riverwards Group, which is led by principals Mo Rushdy and Larry McKnight, P.E., LEED-GA.
The two financing components will fund construction of the 146,158-square-foot project.
Somerset Phase II will include 76 studio apartments, 38 one-bedroom units, and 56 two-bedroom units, along with on-site garage parking.
The development also benefits from a grandfathered 10-year, 100% real estate tax abatement.
Urban Renewal Builders, Riverwards Group’s affiliated general contractor, is constructing the project.
Both the senior loan and the C-PACE financing were structured on a non-recourse basis.
Combined with more than $10 million in sponsor equity, the financing supports a total project cost of approximately $46 million.
The transaction was led by Jack Cortese and David Frankel of D2 Capital Advisors.
The team structured the layered senior debt and C-PACE financing with the goal of maximizing proceeds while reducing Riverwards Group’s overall cost of capital.
Somerset Phase II is located next to the 220-unit first phase of Somerset Station.
Phase I is complete and fully occupied and was sold to the Philadelphia Housing Authority in May 2025 for $58.1 million.
The new financing fully funds another 170 units, which are expected to be delivered in early 2028.
The project is also expected to position the broader Somerset Station master plan for a future third phase.
Riverwards Group has operated across Philadelphia’s Riverwards neighborhoods since 2009 and has delivered more than 1,500 homes and multifamily units.
Its portfolio includes Somerset Station, Kensington Courts, Avenue V, N5 Square, and The Lenora.
D2 Capital Advisors has arranged more than $1.25 billion in financings nationwide across commercial real estate asset classes.
KEY QUOTES:
“Somerset Phase II shows what a proven sponsor and a proven site can do for a financing. Riverwards built Phase I on this same site, delivered it, and sold it to the Philadelphia Housing Authority, so Silver Heights and Nuveen were underwriting a team and a product that had already delivered here. Layer in a thinning supply pipeline ahead of an early 2028 delivery, and we were able to put together a $35.8 million capital stack that fits the business plan and sets Riverwards up well for what comes next at Somerset Station.”
Jack Cortese, D2 Capital Advisors
“We completed significant site work at the property during Phase I, so Phase II was positioned for vertical construction to begin quickly. It was critical for us to get credit for the value we created through that site work and the Phase II entitlements. Jack and the D2CA team made sure we captured that value and delivered proceeds that align with our business plan. Our Riverwards projects have been a reliable source of naturally occurring affordable housing in Philadelphia’s neighborhoods, and Phase II will continue that.”
Mo Rushdy, Principal of Riverwards Group
“This financing demonstrates the benefits of combining senior debt with C-PACE financing. Our longstanding relationship with Nuveen Green Capital and experience executing multiple transactions together helped deliver a streamlined capital stack, lower overall cost of capital, and greater certainty of execution for the Sponsor. We are pleased to partner with Nuveen, D2 Capital Advisors, and Riverwards Group on this transaction.”
Seth Greenwald, Managing Partner of Silver Heights Capital
“We were proud to partner with D2 Capital Advisors to provide C-PACE financing, administered through the Philadelphia Energy Authority, for this exciting new multifamily property in Philadelphia. Through C-PACE, Riverwards Group was able to access a significant non-recourse capital layer at a competitive fixed rate, reducing its overall cost of capital and helping make the project financially viable while delivering much-needed housing to this growing area of the city. This transaction underscores how C-PACE, as a flexible and cost-effective financing platform, can be a crucial part of a capital stack and can positively impact construction financing by bridging the gap between senior debt and equity.”
Mike Doty, Senior Director of Originations at Nuveen Green Capital
