Silver Heights, Nuveen Green Capital Lend $36M on Philly Apartments Build

Riverwards Group has landed $35.8 million of construction financing to develop a multifamily project in Philadelphia as the next phase of its master-planned residential community, Commercial Observer has learned.

Silver Heights Capital provided a $19.9 million senior construction loan in the deal, while Nuveen Green Capital supplied $15.9 million of Commercial Property Assessed Clean Energy (C-PACE) debt for the 170-unit Somerset Phase II development in Philadelphia’s Port Richmond neighborhood. 

“This financing demonstrates the benefits of combining senior debt with C-PACE financing,” Seth Greenwald, managing partner at Silver Heights Capital, said in a statement. “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.

The 146,158-square-foot project is part of a multi-phase Somerset Station master-planned community near the Delaware River. Somerset Phase II is on the same site as the completed 220-unit first phase of the master plan that Riverwards Group sold to the Philadelphia Housing Authority in May 2025 for $58.1 million. 

D2 Capital Advisors arranged the nonrecourse transaction with a team led by Jack Cortese and David Frankel. The deal was structured with layered senior debt combined with C-PACE financing to maximize loan proceeds and lower the borrower’s overall cost of capital, according to D2. 

“Silver Heights and Nuveen were underwriting a team and a product that had already delivered here,” Cortese said in a statement. “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.”

Cortese said there are strong demand drivers for the Philadelphia multifamily sector with the city issuing its fewest residential building permits in 11 years in 2024, resulting in a lower supply pipeline prior to Somerset Phase II’s scheduled 2028 completion. 

Mike Doty, senior director of originations at Nuveen Green Capital, said in a statement, that the transaction underscores how C-PACE serves “as a flexible and cost-effective financing platform” while also bridging the gap “between senior debt and equity.”

Located at 2202 East Somerset Street, 4 miles northeast of Downtown Philadelphia, the project will feature a unit mix of 76 studios, 38 one-bedroom apartments and 56 two-bedrooms floor plans along with on-site garage parking. The development  benefits from a grandfathered 10-year, 100 percent real estate tax abatement, according to Cortese. 

Riverwards Group is also committing $10 million of sponsor equity for the construction project, which will be led by its general contractor, Urban Renewal Builders. The firm has delivered other multifamily projects in Philadelphia that include Kensington Courts, Avenue V, N5 Square and The Lenora.

“We completed significant site work at the property during Phase I, so Phase II was positioned to be ready to go and allow vertical construction to commence quickly,” Mo Rushdy, principal of Riverwards Group, said in a statement. “It was critical for us to get credit for the value we created through that site work and the Phase II entitlements.”

Andrew Coen can be reached at acoen@commercialobserver.com.