Impact Housing JV Gets $112M for San Diego Affordable Project
The modular development's financing package doesn't include any subsidies.
Impact Housing and Verbena Road Holdings have obtained a financing package amounting to $112.2 million for the development of Mission Gorge, a 483-unit modular workforce housing project in San Diego. JLL arranged the financing.
ACORE CAPITAL provided a three-year, $85.2 million construction loan, while Ascendant Capital Partners contributed $27 million in preferred equity. The financing includes no subsidies.
Impact also partnered with Las Palmas Housing & Development Corp., a nonprofit corporation specializing in the development of affordable housing and social service programs.
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The community will rise seven stories at 6171 Mission Gorge Road. Floorplans call for studio and one-bedroom layouts. Units will cater to residents earning up to 80 percent of the area median income.
The modular project will feature a 4,150-square-foot roof deck and 5,114 square feet of ground-floor commercial space. Amenities are slated to include a coworking lounge, gym and pet park, among others.
The site is within walking distance of the Grantville Trolley Station and a Kaiser Permanente medical center. Downtown San Diego is about 8 miles away.
JLL Executive Managing Director Charles Halladay and Associate Joseph Choi, together with Analyst Will Bond, represented the borrower.
Modular’s growing popularity in multifamily
Verbena’s subsidiary, ICON, is a 3D home-printing company utilizing AI technology for architectural input pertaining to design and construction. Its recent technology allows it to build multi-story structures.
Modular design has been steadily gaining traction in the multifamily sector. Roughly 28 percent of modular factory product accounted for multifamily and workforce housing output in 2023, up from 21 percent in 2020, according to a Modular Building Institute report.
Fighting against the affordable housing shortage
In line with the national affordable trends, San Diego County is experiencing a housing shortage. The county was lacking 134,573 units for low-income renter households as of May, according to the California Housing Partnership.
Metro San Diego’s affordable pipeline encompassed about 3,000 units underway in fully affordable communities as of December, according to Yardi Matrix data. Affordable deliveries amounted to more than 900 units this year—a figure above the 750 unit yearly average dating back to 2019, but below last year’s delivery count of approximately 1,000 homes.
One of San Diego’s recently completed affordable communities is Estrella. The 96-unit property developed by Affirmed Housing caters to residents earning between 30 and 80 percent of AMI.
