SAINT PAUL, Minn. – Leading financial services provider Merchants Capital recently secured more than $141 million in financing for Waterfront Station II, a multifamily, mixed-income and mixed-use property currently under construction in the Southwest neighborhood of Washington, D.C. The community is a joint venture between the for-profit Hoffman & Associates, not-for-profit affordable developer AHC Inc., City Partners and Paramount Development.
Situated at 1000 4th Street SW, Waterfront Station II will bring 449 units of market-rate and affordable apartments to the area. Within the 449 total units, 313 will be available at market-rate and 136 will be affordable. Sixty-eight units will be available to households earning at 30% of the area median income (AMI) and an additional 68 will be available for households earning at 50% AMI.
Made possible through an innovative financing model, the affordable housing units were financed using both 4% and 9% Low-Income Housing Tax Credits (LIHTC). Ninety-four of the total affordable units are attributed to the 4% LIHTC while 42 of the total affordable units are attributed to the 9% LIHTC. Land acquisition occurred in 2020, at which time the Waterfront Station II development team executed a 99-year ground lease with the District’s Office of the Deputy Mayor for Planning and Economic Development (DMPED).
Merchants Capital financed the property with three Merchants Bank of Indiana (MBI) construction loans, totaling $141.25 million: a $123.5 million loan, a $2 million loan for the construction of the 9% LIHTC units and a $15.4 million 4% LIHTC loan required for the tax-exempt bond financing. In addition, Merchants provided financing for three separate Fannie Mae 42-month forward commitments for the permanent financing. Each forward commitment had different loan terms to meet the requirements of the market rate, the 9% LIHTC and the 4% LIHTC units, as well as the goals of the borrowers and equity investors.
The full development will consist of a single, 12-story apartment building with approximately 29,000 square feet of retail, educational and commercial space on the ground level with below-grade parking. The commercial space is anchored by AppleTree Public Charter School, a DC-based early childhood education provider and a neighborhood restaurant by Good Company Doughnuts, with an additional 7,000 square feet of retail space available for lease.
Designed by architect Torti Gallas Urban with interiors by interior designer Hickok Cole, the project will include more than 19,000 square feet of outdoor and interior amenity space across four floors of the building. These amenities include a coworking and communal gathering space, an expansive fitness center as well as both entertainment and hospitality lounges with dedicated meeting spaces and an intimate library.
Beyond the indoor amenity spaces, Waterfront Station II will feature a second-floor courtyard, a rooftop terrace and pool, all of which will be enhanced by the work of landscape architect, Michael Vergason. Unique to Waterfront Station II is the number of private balconies and terraces that create the building façade’s signature design. In total, 147 balconies and terraces averaging 150-200 square feet give residents sweeping views of the Washington Monument, the Capitol Building and both the Potomac and Anacostia Rivers. Designed as a LEED Gold project, another exterior feature of Waterfront Station II is the inclusion of solar panels. Installed across the roof of the building, this added sustainability measure will improve the site’s overall energy efficiency.
Anticipated delivery for Waterfront Station II is winter 2023.
To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.