D2 Capital Advisors Secures $35.83 Million Financing for Somerset Phase II in Philadelphia's Port Richmond

D2 Capital Advisors Closes $35.83 Million Financing for Somerset Phase II

D2 Capital Advisors (D2CA) has successfully arranged a significant financing package amounting to $35.83 million for the construction of Somerset Phase II, located in the Port Richmond neighborhood of Philadelphia. This project, a part of the Riverwards Group's broader Somerset Station master plan, involves the development of 170 residential units at 2202 E. Somerset Street.

Financing Structure

The financing consists of a $19.87 million senior construction loan provided by Silver Heights Capital, along with $15.96 million from Commercial Property Assessed Clean Energy (C-PACE) financing sourced from Nuveen Green Capital. This combination is strategically structured to enable Riverwards Group, led by Mo Rushdy and Larry McKnight, to optimize their capital requirements for a total project cost of approximately $46 million.

“Somerset Phase II is a testament to what a reliable sponsor and an effective location can achieve in terms of financing,” stated Jack Cortese from D2CA. The project builds momentum from the completed first phase, which is fully occupied and was sold to the Philadelphia Housing Authority in May 2025 for $58.1 million.

Project and Design Details

The new multifamily development spans 146,158 square feet and promises a diverse unit mix consisting of 76 studios, 38 one-bedroom, and 56 two-bedroom apartments, complemented by on-site garage parking facilities. This undertaking also enjoys the benefits of a 10-year, 100% real estate tax abatement, allowing for economic feasibility and maximized returns.

Riverwards Group’s longstanding commitment to developing Philadelphia’s Riverwards neighborhoods is underscored by their previous successful projects, including Somerset Station and Kensington Courts. Since 2009, the firm has developed over 1,500 residential units across various properties.

A Focus on Affordable Housing

“This financing not only illustrates the benefits of combining senior debt and C-PACE financing but also highlights the importance of delivering affordable housing in Philadelphia,” explained Seth Greenwald, Managing Partner at Silver Heights Capital. He further emphasized that the collaboration between financial institutions contributed to a streamlined capital stack, maximizing economic viability for the project.

Mike Doty from Nuveen Green Capital echoed these sentiments, adding that through C-PACE financing, Riverwards Group accessed a significant layer of non-recourse capital at competitive fixed rates, thus reducing overall costs.

Construction and Future Prospects

The construction for Somerset Phase II is already well underway, benefiting from substantial preparatory site work completed during Phase I. Principal Mo Rushdy commented, “We are excited to continue providing naturally occurring affordable housing in Philadelphia as we move ahead with this next phase.”

As Philadelphia faces a reduced number of residential building permits issued—reportedly the lowest since 2013—Somerset Phase II is well-positioned to fill the market's housing needs, with an expected completion date in early 2028.

In conclusion, the successful arrangement of this financing by D2 Capital Advisors reinforces the integral role of collaborative financial strategies in enhancing urban multifamily developments. As projects like Somerset Phase II move forward, they contribute not only to the local housing market but also to the broader economic landscape of Philadelphia.