The Marlowe at Ashcombe: Construction-to-Permanent Financing for a 350-Bed Student Housing Development

The Deal

Bellwood Campus Partners LLC, a regional student housing developer, is seeking construction-to-permanent financing for The Marlowe at Ashcombe, a ground-up, 350-bed / 105-unit purpose-built off-campus student housing community located directly across from the main gate of Ashcombe State University (enrollment approximately 34,200). The project sits on a 6.4-acre site and will operate under an individual-lease-by-the-bed model, with construction slated to begin in September 2025 and reach substantial completion in May 2027, ahead of a planned Fall 2027 first move-in. Bellwood has approached Cornerstone Capital Bank, which has issued an indicative term sheet for a single construction-to-permanent facility: a floating-rate construction loan that converts in place to a fixed-rate mini-perm loan once the project is complete and a minimum pre-leasing covenant is satisfied. You are the credit analyst assigned to underwrite the request. Using the Sponsor's Offering Memorandum, Cornerstone's term sheet, and a leasing status report pulled 31 days before the loan's pre-leasing covenant test date, you must size the projected stabilized value, test the requested construction loan against the lender's maximum loan-to-cost constraint, and judge whether the project's current leasing pace is adequate to support conversion to the permanent loan without additional lender protections.