Silver Heights and Nuveen Green Capital lend $35.8M on Riverwards' Philadelphia apartments

Riverwards Group has closed $35.8 million of construction debt for the 170-unit Somerset Phase II in Philadelphia's Port Richmond neighborhood, with Silver Heights Capital holding the $19.9 million senior position and Nuveen Green Capital funding the other $15.9 million through Commercial Property Assessed Clean Energy. D2 Capital Advisors arranged the nonrecourse transaction, with a team led by Jack Cortese and David Frankel structuring senior debt layered with C-PACE to stretch proceeds and lower the borrower's cost of capital, according to D2. The project is the second phase of Riverwards' multi-phase Somerset Station master plan near the Delaware River.

At $15.9 million of a $35.8 million debt stack, it is just under half, and it sits above a senior loan rather than standing alone. The C-PACE assessment had a different role in the $172.5 million Shoma Bay construction financing from September, where it was the only debt in the deal. Seth Greenwald, a managing partner at Silver Heights, said in a statement that his firm's long relationship with Nuveen Green Capital and its record of executing multiple transactions together "helped deliver a streamlined capital stack, lower overall cost of capital, and greater certainty of execution for the sponsor." PRED's entity records list a $23.2 million deal closed on Sept. 21 under both lenders, two weeks before this one.

Cortese's demand case rests on scarcity: Philadelphia issued its fewest residential building permits in 11 years in 2024, he said, leaving a thinner supply pipeline ahead of Somerset Phase II's scheduled 2028 completion. The project occupies the same site as the completed 220-unit first phase of the Somerset Station master plan that Riverwards sold to the Philadelphia Housing Authority in May 2025 for $58.1 million, and the new building covers 146,158 square feet at 2202 East Somerset Street, four miles northeast of downtown, with 76 studios, 38 one-bedrooms and 56 two-bedrooms plus on-site garage parking.

Riverwards is committing $10 million of sponsor equity, according to Cortese, and the project carries a grandfathered 10-year, 100 percent real estate tax abatement. Mike Doty, Nuveen Green Capital's senior director of originations, said in a statement that the transaction shows C-PACE serving as "a flexible and cost-effective financing platform" that bridges "the gap between senior debt and equity"—the slot it fills here, above the senior loan and below the sponsor's check. Against 170 units, the $35.8 million of debt works out to roughly $210,000 a unit.