The American construction capital stack is broken. Regional banks have retreated from construction lending, leaving developers stranded with entitled land and no path to financing. Simultaneously, pension funds seek stable, long-duration yield but lack access to housing at wholesale prices. Meanwhile, renters build no wealth despite dedicating 30% or more of their income to housing costs.
Spot Origin proposes a unified solution: a platform that connects pension capital to new development through forward purchase agreements, creates liquid yield strips backed by real property income, and—critically—allows tenants to vest equity over time through continued occupancy. We call this income-driven ownership.
There is a shortage of 7 million units in the workforce housing market. This represents the full housing crisis in the United States.
At an average of 376 units per development—the size of our first deal—it will take exactly 18,618 buildings to close that gap.
Project 18618 is Spot Origin's mission: build 18,618 workforce housing developments to solve the housing crisis. This is not a marketing slogan. It is a calculation, and it defines everything we do.
The Math:
7,000,000 units needed nationwide
÷ 376 units per average development
= 18,618 buildings
Every deal we close is one step toward solving a crisis that affects millions of working families—teachers, nurses, firefighters, service workers—who cannot afford housing in the communities where they work.
Capital partners are not just earning yield. They are funding infrastructure that the market has failed to provide. The returns are real. So is the impact.
Current Status: Deal #1 is signed—an $85M, 376-unit workforce housing development in "ABC City." 18,617 to go.
In 2023, regional banks—historically the backbone of construction lending—retreated en masse. Construction loan originations dropped 38% in a single year. Loan-to-cost ratios fell from 75% to as low as 50%. Seven consecutive quarters of decline followed. Developers who once secured financing with 25% equity now face demands of 40-50%, killing project IRRs and stranding entitled land across the country.
This is not a temporary correction. Basel III capital requirements, CRE concentration concerns, and post-SVB regulatory scrutiny have structurally reduced bank appetite for construction risk. The vacuum is real, documented, and persistent.
Key Data: Construction lending down 38% YoY. LTC ratios at 50-65%. 71% of banks tightened standards for construction and land development loans. (Sources: FDIC, Federal Reserve SLOOS, MSCI Real Capital Analytics)
Spot Origin fills this vacuum through a Forward Purchase Agreement (FPA) structure that aligns developers, lenders, and takeout partners through market-validated pricing.
The core insight: instead of negotiating a fixed purchase price before construction—which creates risk for everyone—we commit the takeout partner to acquire at a fixed percentage discount to the refinance NAV at stabilization. The refinance creates a real market price discovery event: a bank underwriting a loan against actual cash flows is a market event, not an opinion.
Here is how capital flows:
Critical Feature: The FPA Always Closes.
Because the purchase price is a percentage of actual refi value—not a fixed number—there is no scenario where the deal falls through due to valuation. The takeout is guaranteed. The only variable is the price, which adjusts automatically to market conditions.
For the Developer:
For the Takeout Partner (Pension Fund):
For the Construction Lender:
For the Refi Lender:
| Parameter | Value |
|---|---|
| Construction loan | $75M |
| Developer equity contribution | $10M |
| FPA discount to NAV | 10% |
| Conventional stabilized value (without thesis) | $115M |
| Spot Origin thesis premium | +$10M |
| Refi NAV at stabilization (with thesis) | $125M |
| Cash Flow Waterfall | Amount |
|---|---|
| Refi NAV (bank-validated) | $125.00M |
| Refinance at 75% LTV | $93.75M |
| Pay off construction loan | –$75.00M |
| Net from refinance | $18.75M |
| FPA closes at 90% of NAV | $112.50M |
| Pay off refi loan + bank bridge fee (~$95M) | –$95.00M |
| Net from FPA closing | $17.50M |
| Total distributable to equity holders | $36.25M |
Developer Return: With $10M equity in, the developer receives $36.25M—a 3.6x equity multiple (before construction loan interest).
Takeout Partner Basis: Acquires a $125M asset for $112.50M—a built-in 10% discount to the value a bank just underwrote.
| Scenario | Refi NAV | Refi Loan | FPA (90%) | Dev Net* |
|---|---|---|---|---|
| Underperform | $100M | $75M | $90M | $13.75M |
| Base case | $115M | $86.25M | $103.5M | $27M |
| Thesis tracks | $125M | $93.75M | $112.5M | $36.25M |
| Strong outperformance | $140M | $105M | $126M | $49.75M |
*Dev Net = (Refi - $75M construction loan) + (FPA - Refi - ~$1.25M bank fee). Before construction loan interest.
The developer and Spot Origin receive ownership stakes post-money—not as retained equity, but as dilution the takeout partner agrees to in exchange for keeping the execution team engaged. This is fundamentally different from a traditional fee structure where the asset manager gets paid regardless of performance.
The dilution is negotiated per deal:
The FPA discount represents agreed-upon dilution. When the takeout partner acquires at 90% of refi NAV, they purchase 100% of the building. Post-closing, Spot Origin and the developer's ownership stakes are introduced, diluting the takeout partner to 90%.
At FPA closing:
NOI flows according to post-dilution ownership. The pension's "discount" is the dilution they accept in exchange for keeping Spot Origin and the developer engaged as co-owners.
This structure keeps everyone at the table after closing:
The FPA price as a percentage of NAV equals the takeout partner's post-dilution ownership. This is negotiated per deal based on developer track record and market conditions.
| Dev. Promote | Spot Origin | Total Dilution | Takeout Partner Post-Dilution |
|---|---|---|---|
| 0% | 5% | 5% | 95% (pays 95% of NAV) |
| 5% | 5% | 10% | 90% (pays 90% of NAV) |
| 7% | 5% | 12% | 88% (pays 88% of NAV) |
| 10% | 5% | 15% | 85% (pays 85% of NAV) |
For a $125M refi NAV with a 5% developer promote:
| Party | Post-Dilution Ownership | Acquisition Cost | Annual NOI ($6.2M) |
|---|---|---|---|
| Takeout Partner | 90% | $112.5M | $5,580,000 |
| Developer | 5% | $0 (dilutive stake) | $310,000 |
| Spot Origin | 5% | $0 (dilutive stake) | $310,000 |
The takeout partner paid $112.5M for 100% of a $125M building—then accepted 10% dilution to keep the developer and Spot Origin aligned. Their effective basis is $112.5M for 90% ownership, yielding 5.0% on their capital.
Traditional asset managers charge 1-2% of AUM regardless of performance. Spot Origin's 5% ownership stake means we only profit if the building profits. Our incentives are permanently aligned with the capital partner's.
| Structure | Annual Cost on $125M Asset | Tied to Performance? |
|---|---|---|
| Traditional AUM (1.5%) | $1,875,000 | No—paid regardless |
| Spot Origin (5% dilutive ownership) | ~$310,000 (5% of NOI) | Yes—we're co-owners |
Multifamily operators spend enormous sums acquiring and retaining tenants. The industry accepts 50%+ annual turnover as normal, budgeting $3,000-5,000 per turn for make-ready, vacancy loss, and leasing costs. A 300-unit building turning 150 units per year burns $450,000-750,000 annually just replacing tenants.
Spot Origin redirects a fraction of that spend into tenant equity—and captures the difference as NOI.
Consider a 300-unit workforce housing building:
| Conventional Operation | Amount |
|---|---|
| Annual turnover rate | 50% |
| Units turned per year | 150 |
| Cost per turn (make-ready, vacancy, leasing) | $4,000 |
| Annual turnover cost | $600,000 |
| Spot Origin Operation | Amount |
|---|---|
| Annual turnover rate (with equity vesting) | 25% |
| Units turned per year | 75 |
| Cost per turn | $4,000 |
| Annual turnover cost | $300,000 |
| Tenant equity allocation (from NOI) | $150,000 |
| Total retention spend | $450,000 |
The Arbitrage: Spend $150,000 on tenant equity. Save $300,000 in turnover costs. Net improvement to NOI: $150,000/year.
This is not charity. It is capital efficiency.
Traditional operators compete on amenities: pools, gyms, rooftop lounges. These cost money to build, money to maintain, and attract tenants who leave for the next shiny thing. A pool doesn't care if you stay or go.
Equity vesting is a retention-linked amenity. It costs nothing until the tenant earns it by staying. It appreciates in value the longer they remain. And unlike a gym membership, leaving means forfeiting something real.
| Amenity | Upfront Cost | Ongoing Cost | Retention Impact |
|---|---|---|---|
| Pool | $200,000+ | $30,000/yr | Minimal |
| Fitness center | $100,000+ | $15,000/yr | Minimal |
| Rooftop lounge | $150,000+ | $20,000/yr | Minimal |
| Tenant equity | $0 | Performance-linked | High |
The tenant equity "amenity" only pays out when tenants stay—which is exactly when you want to spend money on retention. Every other amenity pays out regardless of whether the tenant renews.
Tenants earn equity through continued occupancy. The schedule is backloaded to maximize retention incentive in later years:
| Milestone | Vesting This Period | Total Vested | Forfeiture if Leaving |
|---|---|---|---|
| Renew for Year 2 | 10% | 10% | 90% |
| Renew for Year 3 | 20% | 30% | 70% |
| Renew for Year 4 | 30% | 60% | 40% |
| Renew for Year 5 | 40% | 100% | 0% |
The backloading is intentional. A tenant in Year 3 has vested 30% but stands to gain 70% more by staying two more years. The opportunity cost of leaving increases each year, creating compounding retention pressure.
When a tenant leaves before fully vesting, their unvested equity is redistributed to remaining tenants. This creates a self-funding retention pool:
Example: 100-unit building, $20,000 equity allocation per unit = $2M total pool.
Year 1: 25 tenants leave before Year 2 renewal, forfeiting $500,000 in unvested equity.
That $500,000 redistributes to 75 remaining tenants = $6,667 additional per tenant.
A tenant who stays now has $26,667 in potential equity—33% more than base allocation—funded entirely by those who left.
Traditional multifamily targets 95% occupancy. Spot Origin targets 110% occupation:
110% = 100% physical occupancy + 10% rent premium
The rent premium is not aspirational—it is the logical consequence of offering something competitors don't. A tenant choosing between two identical buildings will pay more for the one where they build wealth.
The premium is modest by design. We're not claiming tenants will pay 30% more. We're claiming they'll pay 5-10% more for ownership access—and that this premium, combined with reduced turnover, flows directly to NOI.
| NOI Impact | Conventional | Spot Origin | Delta |
|---|---|---|---|
| Base rent (300 units × $1,400/mo) | $5,040,000 | $5,040,000 | — |
| Rent premium (7.5%) | — | $378,000 | +$378,000 |
| Turnover cost | ($600,000) | ($300,000) | +$300,000 |
| Tenant equity allocation | — | ($150,000) | ($150,000) |
| Net NOI impact | — | — | +$528,000 |
The 110% thesis adds over $500,000 annually to NOI on a 300-unit building. At a 5% cap rate, that's $10.5M in additional property value—created purely through more efficient capital allocation.
The mechanics aren't complicated. What's been missing is the infrastructure:
The insight isn't that tenant equity is good for tenants (obvious) or good for society (arguable). The insight is that tenant equity is good for NOI—and therefore good for capital partners, developers, and Spot Origin.
The social impact is a byproduct of optimizing for returns. That's what makes it sustainable.
Vested equity isn't just wealth—it's also a buffer against life's disruptions.
If a tenant hits a rough patch and can't pay rent, they can use their vested equity to cover the gap—at a 2:1 burn rate. Two dollars of equity covers one dollar of rent.
This creates a safety net without creating a loophole:
Example: A tenant with $15,000 vested equity can't pay rent for 2 months ($2,800 total).
At 2:1 burn rate: $5,600 of equity covers the $2,800 in missed rent.
Tenant remains housed. $9,400 in equity remains. Crisis passes. Tenant continues vesting.
Without this mechanism: eviction proceedings begin, tenant loses everything, property eats $4,000+ in turnover costs.
Tenants can burn equity down to 50% of their vested amount before traditional proceedings begin. This prevents indefinite rent avoidance while providing meaningful runway during genuine hardship.
Spot Origin offers multiple pathways for partners to participate in our deal flow—from passive referrals to full-scale origination businesses.
Scouts identify workforce housing deals and make introductions to Spot Origin.
Immediate Stipend:
Referral Bonus (if deal closes):
Scout Economics:
Find a 376-unit workforce housing deal. Make an introduction.
Immediate: $3,760 (paid at LOI, regardless of outcome)
If closes: $62,000/year forever
No license required. No experience needed. Just find developers with unfinanced projects and connect them to capital.
For partners who want to build a business around Spot Origin deal flow, we offer an Originator model. The Originator steps into the developer's seat in the Spot Origin model, receiving the developer's allocation (equity + 10% promote) plus the 1% referral bonus.
The Originator then structures their own arrangement with the actual developer—forwarding a portion of their allocation as needed to align incentives and make the deal work.
An Originator sources a $100M workforce housing deal (400 units). Negotiated terms: takeout partner pays 88% of NAV, accepts 12% post-money dilution (7% developer + 5% Spot Origin). Total NOI: $7M/year.
The Originator model transforms Spot Origin from a single company into a platform. Partners can build entire businesses on top of our infrastructure—sourcing deals, structuring arrangements, and earning perpetual ownership stakes—while we handle capital partner relationships, tenant equity mechanics, and asset management.
This is how Project 18618 scales: not one company doing 18,618 deals, but an ecosystem of Originators each contributing to the mission while building their own enterprises.
The following deal is under signed Letter of Interest and available for capital partner commitment.
| Property Details | |
|---|---|
| Property | XYZ Ave, ABC City, US 10101 |
| Unit Count | 376 units |
| Unit Mix | 171 Studio / 177 One-BR / 28 Two-BR |
| Total Square Footage | 329,343 SF |
| Guaranteed Maximum Price | $85,550,731 |
| Developer Equity | $10,000,000 (11.7%) |
| Projected Gross Annual Rent | $9,873,522 |
| Stabilized NOI | $6,223,876 |
| Entitlement Status | Fully Entitled |
| Opportunity Zone | Yes |
| Est. Groundbreaking | March 2026 |
| Est. Stabilization | March 2028 |
Upon stabilization, the building will be refinanced to establish market NAV. The takeout partner acquires 100% of the building at 90% of NAV, then accepts post-money dilution from Spot Origin (5%) and the developer (5%), ending at 90% ownership.
With a 90/5/5 ownership split:
| Party | Ownership | Annual NOI ($6.2M) |
|---|---|---|
| Takeout Partner | 90% | $5,580,000 |
| Developer | 5% | $310,000 |
| Spot Origin | 5% | $310,000 |
Takeout partner yield on $112.5M investment: 5.0% ($5.58M / $112.5M)
| Scenario | Refi NAV | TP Pays (90%) | TP NOI (90%) | Yield |
|---|---|---|---|---|
| Underperform | $100M | $90M | $5,580,000 | 6.2% |
| Base case | $115M | $103.5M | $5,580,000 | 5.4% |
| Thesis tracks | $125M | $112.5M | $5,580,000 | 5.0% |
| Outperformance | $140M | $126M | $5,580,000 | 4.4% |
Note: Higher NAV means higher entry price but same NOI, so yield compresses. However, higher NAV also means the asset is worth more—the pension owns 90% of a more valuable building.
We believe in honest assessment of what could go wrong.
These are real risks. We are pre-revenue, pre-track-record, and building infrastructure. The FPA structure exists precisely because we acknowledge this reality—everyone's interests are aligned, and downside is bounded. We are asking for the opportunity to prove the model, not blind faith.
Spot Origin will be built in phases. We are honest about what is achievable near-term versus what requires years of development.
Spot Origin is infrastructure. Not an app. Not a feature. Infrastructure.
We connect pension capital to developers through forward purchase agreements priced at a percentage of market-validated NAV. We separate the deed from the yield so ownership can exist unencumbered. We give tenants a path to wealth through vesting equity tied to continued occupancy.
Where we are today: Pre-revenue. Pre-track-record. Seeking a strategic takeout partner to prove the institutional mechanism. We are honest about what is proven (nothing yet) and what is theoretical (most of it). But the structure is sound: every party's incentives are aligned, the FPA always closes, and tenants have a reason to stay.
The construction capital stack is broken. We're fixing it.
Renters can't build wealth. We're changing that.
And when ownership becomes the amenity, we don't just fill buildings—we create communities where tenants stay, care, and build wealth where they live.