Loan Closings

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CARMEL, Ind. – Leading multifamily financing provider Merchants Capital today announced it has secured a $15.5 million U.S. Department of Housing and Urban Development (HUD) loan for Lakeshore Manor in East Chicago, Indiana. Located on the corner of 136th and Main Street on the northwest side of the city, the new development will bring 206 units of income- and age-restricted housing to the area. Originally designed to replace the now-closed John B. Nicosia senior building, Lakeshore Manor will be entirely new construction, consisting of two four-story buildings that comply with National Green Building Standards (NGBS). The 221(d)(4) new construction deal will allow the property to feature 206 one- and two-bedroom apartment units reserved for seniors 62 years of age and older and/or disabled residents, with rent restricted at 60% of the area median income (AMI). Merchants Capital secured $15.5 million in HUD financing to support development of the project, along with a $13.5 million equity bridge loan through its parent company Merchants Bank of Indiana. Cinnaire, the property’s equity investor, provided a $21.7 million LIHTC investment in the project for a total development cost of $51 million. Upon completion of construction, all units at Lakeshore Manor will feature electric ranges, refrigerators, laminate countertops, ceiling fans, window treatments, central air conditioning and walk-in closets. As a senior housing complex, the development will be subject to Section 100-2 Housing and Urban Development (HUD) Minimum Property Standards and thus will include automatic temperature limit controls in the shower, electrical outlets for night lights between the bed and bathroom, handrails on at least one side of all interior corridors and an emergency call system in each unit. Additionally, 12 of the 206 total units at Lakeshore Manor will be designed as fully accessible, hearing-impaired units and will comply with the American with Disabilities Act (ADA) and Uniform Federal Accessibility Standards (UFAS) requirements. The property’s location in East Chicago makes it part of the city’s ongoing North Harbor Redevelopment Area project, an effort to improve public spaces including streets, playing fields, playground equipment and concert stages at Nunez and Callahan parks. With these proposed upgrades, and the new Lakeshore Manor housing development, the city hopes to provide major economic contributions that will support the long-term sustainability of the area. “Cinnaire has been changing lives and transforming neighborhoods in Indiana for more than 25 years,” said Keith Broadnax, Cinnaire Senior Vice President, Business Development. “We remain focused on creating housing opportunities to ensure seniors can live affordably in the communities they call home. Lakeshore Manor residents will enjoy living in the heart of the revitalization taking place in East Chicago. We’re proud to join our partners at Merchants Capital to make the vision of Lakeshore Manor a reality.” The new property is expected to debut in February 2024. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn and Instagram.
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Merchants Capital Finances $15MM+ for Affordable Senior Property in East Chicago, Indiana
Golden Gate Bridge
CHICAGO – The Chicago office of Merchants Capital recently secured a $35.6 million construction loan on behalf of HomeRise for the rehabilitation of San Cristina, a historic 58-unit single room occupancy (SRO) rental property located in San Francisco, which provides housing and support services to formerly homeless residents. The construction loan was provided by Merchants Bank of Indiana (MBI) with participation by the AFL-CIO Housing Investment Trust (HIT). Originally constructed in 1913 as an office building, San Cristina was acquired in 1991 by HomeRise and converted into one of the earliest permanent supportive housing communities in San Francisco. Upon completion, San Cristina will continue to provide affordable housing to the formerly unhoused and improve residents’ quality of life through enhanced support services offered by HomeRise. “We are excited about the opportunity to restore our San Cristina housing to its historical glory. Our funding partnership with Merchants Capital is a vital part of our ability to continue to provide supported housing opportunities,” said Rick Aubry, CEO of HomeRise. San Cristina was one of 27 projects to receive a 2022 California Housing Accelerator Award which allocated $24.2 million to the project as part of the state’s comprehensive strategy to address housing affordability for the state’s lowest-income households. In addition to the award, the project also received funding from the California Department of Housing and Community Development Multifamily Housing Program, the Mayor’s Office of Housing and Community Development and the Federal Home Loan Bank of San Francisco’s Affordable Housing Program through Century Housing Corporation. “Our participation in the rehabilitation of the San Cristina property is part of the AFL-CIO Housing Investment Trust’s continuing commitment under its billion-dollar Bay Area Initiative launched in 2020,” said HIT CEO Chang Suh. “This infusion of capital creates union jobs and provides much-needed housing for people who are at risk and experiencing homelessness.” This investment by Merchants Capital and the AFL-CIO HIT marks the two firms’ second investment with HomeRise, after the recently completed Jazzie Collins Apartments located at 53 Colton Street in San Francisco’s Hub neighborhood. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.
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Merchants Capital Secures $35MM+ for Supportive, Affordable Housing in San Francisco
Boston
CARMEL, Ind. – Leading financial services provider Merchants Capital today announces the completion of the rehabilitation of a federal Low-Income Housing Tax Credit (LIHTC) project located in Houston, Texas, known as Knolls at West Oaks Apartments, by prominent affordable housing developer, Dominium. Merchants Capital provided $10.8 million in tax credit equity in exchange for the LIHTC. It also originated debt financing for the project under its Government-Sponsored Enterprise (GSE) license. The comprehensive financing package offered by Merchants supported the acquisition, rehabilitation and re-syndication of the residential development, which is an existing, income restricted, LIHTC property originally constructed in 2003. Set within a larger mixed-use neighborhood with commercial, residential and educational spaces, Knolls at West Oaks consists of 168 total units (84 two-bedroom and 84 three-bedroom floor plans). All units are restricted to individuals earning no greater than 60% of the area median income (AMI). For the project financing, Merchants Capital originated and will service a Freddie Mac tax exempt loan, a Merchants Bank of Indiana equity bridge loan and a 4% LIHTC equity investment. The renovation included an extensive remodel of the existing clubhouse, a new fitness center and supportive services room, the construction of a new bus stop, installation of a new playground and the addition of a new pavilion and grilling area. Resident units will receive new appliances, quartz countertops, flooring, low-flow plumbing fixtures, a full cabinet replacement and energy-efficient light fixtures. As part of the renovation, all units were modified to meet current accessibility standards. Five units were converted into ADA units, and an additional four units were modified into audio-visual impaired units, for a total of nine ADA-compliant units. “We appreciate the partnership and collaboration from Merchants Capital on this rehabilitation that keeps 168 affordable apartment homes in the Houston area,” said Neal M. Route, Vice President and Project Partner at Dominium, the property developer. Rehabilitation began in August 2021 and was completed in September 2022. Merchants Capital extends their sincere congratulations for the successful completion of the project. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.
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Merchants Capital Provided $10.8MM+ in Equity for Low-Income Housing Tax Credit Property in Texas; Rehabilitation Completed
Apartment Building
NEW YORK – The New York office of leading multifamily financial services provider Merchants Capital today announces it has provided more than $13 million in financing to a joint venture between Gorman & Company and the Gary Housing Authority (GHA) for the rehabilitation of the historic Carolyn Mosby Apartments in Gary, Indiana. The financing is integral to preserving the affordability of the project for its residents. Located at 650 Jackson St. just west of downtown Gary, Carolyn Mosby Apartments was built by the GHA in the late 1960s as a public housing development. The eight-story high-rise contains 142 units in a variety of one- and two-bedroom floor plans reserved for senior and/or disabled residents earning 30-60% of the area median income (AMI). The project received an allocation of $13 million of tax-exempt bonds from the Indiana Housing and Community Development Authority, enabling GHA to partner with Gorman to convert it from public housing to a long-term Section 8 Housing Assistance Payments (HAP) Contract as a Section 18 public housing disposition and perform much-needed renovations while continuing to provide rental assistance to its residents. Merchants Capital New York facilitated the bond purchase in the form of a $13 million Merchants Bank of Indiana (MBI) construction loan. Following construction completion, the loan will convert to a $5.239 million permanent loan pursuant to a Freddie Mac Tax-Exempt Loan (TEL) Forward Commitment, to be serviced by Merchants Capital. The project also received equity investments totaling approximately $9.7 million in return for federal Low-Income Housing Tax Credits and federal Historic Rehabilitation Tax Credits. Additionally, the project benefits from a variety of soft financing and other incentives, including a property tax exemption, all integral to maintaining the project’s affordability. The financing will allow Carolyn Mosby Apartments to undergo both interior and exterior improvements, including updates to all electrical and plumbing fixtures to improve the energy efficiency and water usage throughout the property. Common residential areas for residents will be upgraded on each floor as well. Construction completion is expected in 2024.
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Merchants Capital Finances $13MM for Historic Affordable Housing in Gary, Indiana
Apartment Project in Roselle, Illinois
CHICAGO – The Chicago office of Merchants Capital is pleased to announce that it has closed a 221(d)(4) new construction/permanent loan for Metro 19 Apartments in Roselle, Illinois. The U.S. Department of Housing and Urban Development (HUD)-insured loan will provide construction and permanent financing for 295 transit-oriented, multifamily units adjacent to the Roselle Metra commuter rail station situated half a mile east of the Main Street commercial district. Merchants Capital securitized the loan and worked closely with the AFL-CIO Housing Investment Trust (HIT), which purchased the Ginnie Mae-backed security that guarantees the timely payment of principal and interest on the Metro 19 loan. The HIT, a fixed-income, investment grade mutual fund, has a long history of working closely with for-profit and non-profit developers, housing agencies, members of the mortgage banking community, labor unions, HUD, government-sponsored enterprises (GSEs) and others to structure the financing needed for their real estate developments. As a result of the HIT’s involvement, the luxury apartment complex will be 100% union built – a requirement on all construction-related projects financed by the HIT. “We are proud of everything that HIT and Merchants Capital have accomplished together. In addition to providing much-needed housing, Metro 19 is creating well-paying jobs for trained workers, making a difference to the broader economic health of the community,” said Chang Suh, CEO at AFL-CIO HIT. A key feature of this development, and a unique capability of the Merchants organization, was the ability to finance both the apartment building and an adjacent garage. This garage structure will provide 542 parking spaces for Metro 19 tenants and area commuters who use Metra trains to get to their places of employment. The garage component of the development involved multiple parties including a land swap that made it possible to assemble the land needed for the garage structure. Working with the Village of Roselle, Merchants Bank of Indiana (MBI) was able to provide the financing for this land assembly and construction loan. The loan will be repaid from revenues generated by property value appreciation under an existing Tax Increment Financing (TIF) in the East Irving Municipal District. “This project is exciting for our company, as it allowed us at Merchants Capital a unique opportunity to work in tandem with our colleagues at Merchants Bank of Indiana,” said Lee Oller, Executive Vice President and head of Merchants Capital’s Chicago office. “This complex transaction codified a land swap between Metra and the Village of Roselle to accommodate a parking garage for apartment residents and Metra commuters. The new complex will bring much needed residential units to the area, and we are honored to have been a part of the development project.” “Merchants’ unique ability to originate both the HUD-insured loan on the apartment building, and Bank financing on the parking garage, gave us the flexibility to meet the financing requirements of the various stakeholders and help make the overall development possible,” said Emmett Donovan, Senior Vice President at Merchants Capital. “Metro 19 gave us a chance to finance an important property that will bring nearly 300 housing units to the suburbs of Chicago. We look forward to growing our developer partnerships across the Midwest so that we can continue to provide even greater access to housing for residents across the region.” This is the second HUD-insured project Merchants has financed with the developer, Avgeris and Associates. The five-story building is designed around a central courtyard and amenities include a business office, fitness center, golf simulator, dog spa, outdoor pool and enclosed rooftop lounge. The property will also receive a National Green Building Standard (NGBS) certification upon completion of construction. The green certification ensures that the property will operate at peak energy efficiency, reducing utility costs for both the developer and building residents. Construction is underway with leasing anticipated to begin in late 2023. “We couldn’t be more excited about our Metro 19 Apartment development in downtown Roselle. This high-end building in a TOD location will be an excellent addition to the other luxury apartment communities in our portfolio. Our residents love being able to walk or bike to public transportation, restaurants, shops and local nightlife. We are excited to have broken ground on the Metro 19 development. It would not have been possible without the hard work and strong support from the Village of Roselle, HUD, the AFL-CIO HIT, METRA, and of course Merchants Capital and Merchants Bank of Indiana,” said Tim Knudson, Vice President at Avgeris and Associates. ###
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Merchants Capital and Merchants Bank of Indiana Secure Financing for Transit-Oriented Apartment Project in Roselle, Illinois
New York City
NEW YORK – The New York office of leading financial services provider Merchants Capital today announces it has provided more than $104 million in financing for Harlem River Houses and the adjacent Harlem River II Campus, collectively known as Harlem River Houses I and II. The New York City Housing Authority (NYCHA) property dates back to the 1930s and represents a significant milestone in public housing as one of the first two properties in New York funded, developed and owned by the federal government. Constructed in 1936 and debuting in 1937, Harlem River Houses was built as an attempt to amend the poor housing opportunities for African American residents in the Harlem neighborhood. At the time, public housing was segregated in New York City and the limited options available to African Americans were deteriorating and significantly overcrowded. As such, construction of Harlem River Houses served great importance to many local residents by offering affordable and safe housing at a time when other options were scarce. In 1979 after 42 years in service, Harlem River Houses was recognized on the National Register of Historic Places for both its noteworthy architecture and social history in the New York City community. Located between West 151st Street and West 153rd Street along Harlem River Drive and Macombs Place, Harlem River Houses currently features 690 apartments offered at 100% affordability to low-income residents in the area. Upon renovation, the property will offer 693 apartments spread across eight residential buildings that house more than 1,400 residents. Merchants Capital provided more than $104 million on behalf of a joint venture between the Settlement Housing Fund and West Harlem Group Assistance to support comprehensive renovation of the properties. The financing structure consisted of a straight-to-permanent New York City Housing Development Corporation (NYCHDC) Freddie Mac Risk Share loan crafted by the NYCHDC, Freddie Mac and Merchants Capital. To date, Merchants has provided nearly $480 million in financing towards more than 3,300 units as part of the NYCHA PACT projects throughout New York City. As the largest public housing authority in North America, NYCHA is home to 1 in 15 New Yorkers. Rehabilitation to the property is expected to begin this spring, and the renovation is expected to be completed between 2024 and 2025. Renovations will include upgrades to apartments, common areas, elevators, security and heating systems. Upgrades in units will include new kitchens, bathrooms, floors and appliances along with updates to windows and building exteriors. Sidewalks, gardens and sculptures within the property grounds will be restored and new playgrounds, benches and activity spaces will be installed for residents' use. Additionally, all electrical, mechanical and plumbing systems will be renovated or replaced. “We are so excited to get to work on the restoration of Harlem River Houses,” said Alexa Sewell, President of Settlement Housing Fund, Inc. “This investment is a huge win for public housing, for the neighborhood, and most importantly, for the residents of Harlem River Houses. We wouldn’t be here without the creativity and tenacity of the Merchants team.” To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn and Instagram.
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Merchants Capital New York Provides $104MM+ for Historic Affordable Property in Harlem, New York
New York Skyline
NEW YORK – The New York office of leading financial services provider Merchants Capital today announces the company provided approximately $1.15 billion in debt financing during 2021 for affordable, multifamily and senior housing preservation and development within the region, earning recognition as a top housing financer in the New York area. The milestone reflects Merchants Capital New York’s continued success and expansion into a diverse base of offerings for clients, including on-book, Freddie Mac, Fannie Mae and Federal Housing Administration (FHA) loan products. Merchants’ lending volume extends to a broad swath of affordable projects, including acquisition, preservation and new construction loans for 4%, 9%, Section 8, public, supportive and mixed-income housing projects. Merchants Capital New York is one of Merchants’ six production hubs nationwide, in addition to Indianapolis, Chicago, Saint Paul, Boston and Washington, D.C., which opened in 2021. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.
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Merchants Capital New York Arranged $1.15BB in Financing for Affordable, Multifamily and Senior Housing Development & Preservation in 2021
Apartment Building
CARMEL, Ind.  – Leading financial services provider Merchants Capital announced today it has arranged $13 million in debt financing and $7.2 million in equity financing to support the renovation and redevelopment of Adcock Joyner Apartments in Oakland, California. The mixed-use property is a historic development, originally constructed in 1915 as a hotel and converted into affordable housing in the early 1990s. Situated at 532 16th St. in the heart of downtown Oakland, Adcock Joyner provides housing for residents earning no greater than 50% or 60% of the area median income (AMI). The property features 25 studio and 25 one-bedroom apartments with excellent walkability to Oakland’s public transportation and major thoroughfares. The first floor of the mixed-used development features more than 2,500 square feet of commercial space occupied by a local nonprofit that helps homeless, poor and disabled individuals achieve health and self-sufficiency. To finance the renovation, Merchants Capital provided more than $20 million in total debt and equity financing, which will fully fund the project through the 4% Low-Income Housing Tax Credit (LIHTC) program. Following completion of the renovation, the property will operate under a new Housing Assistance Payments (HAP) contract covering 100% of the revenue-generating units, ensuring the property will remain affordable for residents in the years to come. “Right now, the need for quality, affordable housing is exponential in the U.S. but especially in the state of California,” said Eddie Dietrick, Vice President at Merchants Capital. “With our full-service lending platform, we are able to better serve the needs of our clients and support their work in revitalizing affordable housing properties across the country. We are grateful to have partnered on this project and look forward to expanding Merchants’ presence along the West Coast.” “The California housing market is truly unlike any other in the country, and we are thrilled to showcase Merchants’ commitment to the area by serving as the financier for this important redevelopment project,” said Linda Hill, Executive Vice President of Tax Credit Equity at Merchants Capital. “We are working to expand our presence nationally and having the opportunity to partner on such a significant California property is a step in the right direction for our company.” Significant renovations will be made in each residential unit, including upgrades to all kitchen surfaces and appliances, all bathroom surfaces and fixtures, plumbing, flooring, electrical updates and more. Exterior renovations include repairs to the building’s fire escape, new roofing, new HVAC units, elevator upgrades, enhanced security systems and more. The first-floor commercial space will be reconfigured and renovated, with new kitchen cabinets, fixtures and flooring among others. “We are excited about the project and our partnership with Merchants Capital and Progressive Affordable Development,” said James Hill, President of Adcock Joyner Preservation. “This renovation helps us continue our long-term objective of providing stable affordable housing in the downtown Oakland sector. We value our relationship with Merchants Capital and are most grateful for the expertise and support provided while we bring our vision into reality.” Renovation to the property began in November 2021 and is expected to be completed by January 2023. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.
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Merchants Capital Arranges $20MM+ in Total Financing for Historic Affordable Development in Oakland, California
Apartment Building
Parkside Parcel 8 CHICAGO – The Chicago office of leading financial services provider Merchants Capital recently secured more than $110 million in total financing for Parkside 8 and Parkside 10, two mixed-use, workforce housing developments located in Ward 7 in Washington, D.C. Upon completion, Parkside 8 and 10 will feature 230 total residential units and approximately 14,000 square feet of commercial retail space. The projects are being co-developed by City Interests Development Partners and Ravinia Capital Group and they closed on the joint venture (JV) equity with the Opportunity Zone strategy managed by Bridge Investment Group. The projects will address the need for workforce housing in an expensive market, offering rental housing for low- and moderate-income households. Parkside 8 and 10 are part of a larger, 3.1-million-square-foot and master-planned development known as Parkside. The aggregate Parkside mixed-use development will include between 1,500 and 2,000 residential units, up to 50,000 square feet of retail space, 860,000 square feet of office space, a one-acre park and a new pedestrian bridge that crosses over Kenilworth Avenue and I-295 linking the Eastland Gardens, Kenilworth and Parkside neighborhoods with the Minnesota Avenue Metrorail Station. Additionally, Parkside offers four neighborhood educational institutions and a primary care clinic that serves both the developments’ residents and adjacent neighborhoods. Parkside 8 and 10 will create workforce housing without the need for federal tax credit subsidies typically required for affordable developments. Within the new properties, select units will be reserved for residents earning between 80% and 120% of area median income (AMI). The new developments are located within the Mayfair/Parkside Opportunity Zone which has seen significant investment through the opportunity zone structure. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram. To finance the properties, Merchants Capital secured $56 million of construction loans provided by Merchants Bank of Indiana and $59 million in permanent financing through Freddie Mac Non-Low-Income Housing Tax Credit (LIHTC) Forward Commitments and Freddie Mac Permanent Loans.
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Merchants Capital Secures More Than $110MM+ in Total Financing for Two Mixed-Use, Workforce Housing Developments in Washington, D.C.
Mixed-Use Development in Washington, D.C.
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.
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Merchants Capital Secures $141MM+ for Mixed-Income, Mixed-Use Development in Washington, D.C.