Press Release

NEW YORK – Mortgage banking company, Merchants Capital, has provided $375 million in financing on behalf of a joint venture between Omni New York LLC (“Omni”), The Arker Companies (“Arker”), Dabar Development Partners (“Dabar”), and Bedford Stuyvesant Restoration Corporation (“Restoration”) to purchase and complete major renovations for more than 2,600 units scattered across nine Brooklyn developments, referred to as the NYCHA Brooklyn Megabundle (“PACT Brooklyn Bundle II”). In 2018, the Mayor’s Office and the New York City Housing Authority (“NYCHA”) released NYCHA 2.0, a comprehensive 10-year, $24.4BB plan to preserve NYC’s public housing, through capital investments which ensure residents have the safe, quality, and affordable homes they deserve. The cornerstone of NYCHA 2.0 is NYCHA’s Permanent Affordability Commitment Together (“PACT”) Preservation Initiative. PACT focuses on leveraging HUD’s Rental Assistance Demonstration Program (“RAD”), as well as other Section 8 programs, to marshal private debt and equity investment in NYC’s public housing stock. PACT Brooklyn Bundle II consists of a nine-development portfolio, with 2,625 units, located across Brooklyn. As part of its PACT Initiative, NYCHA issued an RFP for qualified applicants to finance, rehab, and manage this portfolio, which represents the largest preservation transaction executed to date under NYCHA’s PACT Initiative. The joint venture partnership between Omni, Arker, Dabar and Restoration was selected as the recipient of this RFP. The highly structured financing, crafted by the New York City Housing Development Corporation (“NYCHDC”), Freddie Mac and Merchants Capital in a collaborative effort, consists of a straight-to-permanent NYCHDC Freddie Mac Risk Share loan of approximately $375,000,000, which will fund the acquisition, rehabilitation and recapitalization of the property. The landmark NYCHA PACT transaction will benefit more than 6,300 residents by providing comprehensive upgrades to 2,625 apartments and common areas, including the complete renovation of residential unit interiors, installation of security systems, vital site improvements, common area improvements, community facility improvements, building exterior improvements, and replacement of building systems, as well as extensive electrical, mechanical and plumbing upgrades. The transaction will support the development, management and social service plans for nine developments: Armstrong I, Armstrong II, Weeksville Gardens, Berry Street-South 9th Street, Marcy Avenue-Greene Avenue Site A, Marcy Avenue-Greene Avenue Site B, 572 Warren Street, Independence Towers, and Williams Plaza. “Growing up in NYCHA Nathan Straus Houses, this transaction had a much deeper meaning – it brings me such joy to be able to provide quality housing to those who need it most, and to be able to work with people in this industry who are so proud and dedicated to working towards this same goal,” said Jessica Cherepski, Merchants Capital Senior Vice President and Chief Underwriter on the deal. “We’re honored to be a part of the team that closed this transaction which, beyond being historic, will affect meaningful change for thousands of deserving residents,” said Mathew Wambua, Merchants Capital Vice Chairman and Leading Originator on the deal. “Our gratitude is immeasurable and extends to our clients, Omni and Arker, as well as the innumerable parties and individuals who made this possible.” “Merchants Capital’s extensive lending expertise sets them apart,” said Eugene Schneur, Managing Director at Omni New York LLC. “We are deeply committed to guaranteeing local communities thrive and being part of the NYCHA Brooklyn PACT bundle is a perfect chance to support local Brooklyn neighborhoods, allowing communities to enjoy improved homes for generations.” “We are proud and excited to get to work on these critical repairs and bring modern amenities to the thousands of residents in the Brooklyn PACT bundle,” said Arker Companies Principal Daniel Moritz. “The NYCHA PACT program puts the community first and sets a new standard for preserving affordable housing for New Yorkers. Our hope is that this new partnership will improve the quality of life for residents and open up even more opportunities for their families.” “Together we are breathing new life into affordable housing developments that serve thousands of Brooklyn residents,” said Michael Patterson, Vice President of Underwriting and Credit at Freddie Mac Multifamily. “Freddie Mac is proud to have worked with our partners at Merchants, Arker, Omni and in city government to bring about this historic transaction, which brought out the best in each of the teams involved. This is an agreement that values communities, ensures residents have safe and modern housing and, most importantly, it preserves affordability where it is needed most.” To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn.

Mortgage banking company Merchants Capital recently structured the permanent financing for Goddard Riverside Community Center’s Phelps House, a 169-unit affordable housing complex for seniors, located at 595 Columbus Ave. (at 88th Street), to help secure the financial future of the property. Phelps House has historically provided – and through the success of this transaction will continue to offer – affordable, subsidized housing and services for low-income older adults in one of the most expensive and prestigious neighborhoods of New York City: the Upper West Side of Manhattan. The property also houses the Goddard Riverside offices and a full-service Senior Center which serves residents from the surrounding community. This long-term financing will enable the owner to keep the units affordable to tenants, while also continuing to provide them with quality housing by making capital improvements, including plumbing and accessibility upgrades. Additionally, the financing will extend the affordability period and subsidy term by a minimum of 20 years to ensure continued operations of the highest standard in the long term, in accordance with the Goddard’s mission to provide high quality senior services to their residents. This Freddie Mac and New York City Housing Development Corporation (HDC) Risk Share financing vehicle benefits Goddard, one of the oldest non-profit/social services providers in the city. “The Phelps House transaction exemplifies the type of mission-driven preservation of affordable housing that we love to be a part of,” said Merchants Capital Vice Chairman Mathew Wambua. “We are grateful to Goddard for their vision and commitment to community, and we are deeply appreciative to HDC, Housing Preservation & Development (HPD), Freddie Mac, and Rockabill Consulting for their partnership. Merchants Capital is proud to have been a participant in assisting the operating of a pillar of the community such as Goddard Riverside.” Last year, more than 22,000 New Yorkers took part in the wide range of activities offered by Goddard.  The agency’s programs range from early childhood education and school-based/after school-based programs, to providing over 540 units of permanent housing with on-site supportive services. Goddard also provides outreach with extensive aid to people living with mental illness and those who are experiencing homelessness, as well as assistance to older adults and those with mobility impairments. “Goddard Riverside’s goal is to invest in people and strengthen the community, and older adults are a key part of that picture. Goddard will be able to continue providing high-quality housing at an affordable price for them,” said Goddard Riverside Executive Director, Roderick L. Jones, Ed.D. “The new resources will allow Goddard to enhance efforts to ensure those most in need are helped.” “Rockabill is grateful for our longtime partnership with Goddard Riverside Community Center, and for the opportunity to assist with their affordable housing preservation and development goals,” said Niall Murray, Managing Principal of Rockabill Consulting and Development. “This transformative deal was the result of a strong and committed group from Goddard Riverside, Merchants Capital, Freddie Mac, HUD, HPD, and HDC working to ensure this vital Upper West Side senior housing remains affordable and viable in the long term. Through the forward-thinking initiative of the Goddard Riverside staff and board of directors, Phelps House will continue to house low-income seniors in the community for years to come.”

NEW YORK (Feb. 18, 2020) – Mortgage banking company Merchants Capital today announces the hiring of Evan Gibson as Vice President of Debt Strategies. Gibson brings with him a diverse background in capital markets and commercial real estate to Merchants Capital. Most recently, Gibson served as the head of a direct lending platform for a top HUD lender, with a focus on health care and multifamily asset classes, which included both value-add and stabilized properties. Gibson is a graduate of the University of Washington with a degree in mathematics. In his new position, Gibson will lead Merchants Capital’s Debt Strategies group, which will focus on developing both bridge and permanent debt solutions outside of the typical balance sheet and agency landscape. Based in the company’s New York City office, Gibson will work collaboratively with Merchants’ originations, credit and capital markets teams to roll out these new solutions to clients. “When we look around an increasingly competitive agency lending marketplace, our company needs to continue to find ways to deliver innovative products to our customers,” said Brian Sullivan, COO of Merchants Capital. “Evan’s deep experience and key contacts will support the growth of this new channel, giving our producers more tools in their kit to find industry leading solutions for their clients.” Gibson is also a veteran of the United States Marine Corps, where he was a Team Leader at 2nd Reconnaissance Battalion. In 2009 he deployed to Now Zad in Afghanistan’s Helmand Province as both a Reconnaissance Marine and Scout Sniper. “I’ve been fortunate to see all sides of multifamily and health care agency execution, which has taught me just how critical the need is for innovative approaches to these deals in the marketplace. I am looking forward to developing the unique alternatives that will be key to our growth,” Gibson said. “The team at Merchants shares my vision to lead the industry with the client’s needs first in mind.” To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn.

NEW YORK (Jan. 29, 2020) – Mortgage banking company Merchants Capital has secured $40.9 million in refinancing for The Tapestry, a 12-story gateway residential building in the heart of Harlem, Manhattan, New York City. The financing has two components: a $35.4 million Freddie Mac Credit Enhancement and a $5.5 million cash loan. Both the fixed-rate credit enhancement and supplemental aspect were secured on behalf of Jonathan Rose Companies and Lettire Construction Corporation. The Tapestry was originally financed in 2008 through a combination of Freddie Mac credit-enhanced, variable-rate and tax-exempt private activity bonds, Low Income Housing Tax Credits, and additional subsidized mortgage financing through the New York City Housing Development Corporation (HDC) and the New York City Department of Housing Preservation and Development. This transaction effectively changes the mode of the underlying HDC variable-rate bonds to fixed-rate bonds. Additionally, a cash tail component was incorporated to provide proceeds to pay swap breakage fees and cover associated transaction costs. By doing so, the borrower will replace the costly in-place loan with a much more favorably priced structure. “This deal’s successful execution represents opportunities on multiple fronts for Merchants Capital, Jonathan Rose, Freddie Mac and HDC,” said Merchants Capital Vice Chairman Mathew Wambua. “Jonathan Rose is one of New York City’s premier and most prolific affordable mixed-income developers, and we are proud to have assisted them in executing this complex yet sound affordable multifamily transaction,” said Merchants Capital Vice President Michael Milazzo. Located at 245 E. 124th St. at the foot of the Robert F. Kennedy Bridge, The Tapestry is part of the 125th Street Corridor Rezoning, a multi-agency effort to infuse the area with cultural, retail, entertainment and residential uses. The 185-unit, mixed-income rental building sets 50% of the apartments aside for market-rate tenants; 30% of the apartments for middle-Income tenants with rents set at 130% of the area median income (AMI); and 20% of the apartments for low-income tenants with rents set at 40% and 50% of AMI. Additionally, The Tapestry features about 7,000 feet of ground-floor retail space, consisting of five commercial spaces. “Jonathan Rose Companies is proud to partner with Merchants on this customized financing solution,” said Nicholas Maloney, Associate Director of Jonathan Rose Companies. “Their decades of multifamily industry experience and housing industry knowledge were clear from inquiry to closing, and we are excited to continue our work in revitalizing the 125th Street Corridor and providing transient oriented, environmentally friendly housing.” To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn.

CARMEL, Ind. (Jan. 20, 2020) – Mortgage banking company Merchants Capital has secured $59 million in financing for Bottleworks District, a mixed-use project coming to Indianapolis’ North Mass Ave. corridor in September 2020. The fully funded, three-year Merchants Bank of Indiana New Construction Loan was secured on behalf of Hendricks Commercial Properties. As the Bottleworks development reimagines the Coca-Cola bottling plant, part of the financing involves Indiana Industrial Recovery Tax Credits. Known as the DINO tax credit, these credits provide an incentive for companies to invest in former industrial facilities requiring significant rehabilitation or remodeling expenses. “This transaction is a bit outside our box, and it’s very impressive that our team – including Kate Belser, Ryan Thompson and Daniel Dixon – were able to identify risks, mitigants, structure tweaks and more to ultimately help us execute this financing,” said Matt Kaercher, Merchants Capital senior vice president and leading originator on the deal. “Bottleworks is a banner project for the city of Indianapolis and one Merchants Capital can say it had a hand in forever.” Bottleworks will serve as a culinary, arts, and entertainment hub, featuring the city’s first food hall, a boutique hotel, unique residential options, as well as 180,000 square feet of flexible office space and 175,000 square feet of prime retail space. “Hendricks is proud to partner with Merchants to bring Bottleworks District – a fusion of past and present in the heart of historic neighborhoods – to Indianapolis,” said Mark Koziol, chief financial officer at Hendricks Commercial Properties. “Our $300 million, 12-acre urban mixed-use development is the largest private development of its kind in Indiana, and we can’t wait to see it come to life in fall 2020.” To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn.

The Manhattan office of the mortgage firm Merchants Capital has secured more than $37 million in funding for three supportive housing developments in New York City utilizing the Freddie Mac Unfunded Forward Commitment. “Merchants Capital was able to structure exceedingly beneficial terms on several developments this year by providing 35- and 40-year amortization,” said Ben Levine, Senior Vice President of Merchants Capital. “Given the high cost of development in New York City, this loan structure can be an important tool to provide gap funding for both preservation and new construction projects. We are pleased to offer an extended amortization loan product that has been well received by our valued counterparties at Freddie Mac and New York City HPD. ” The redevelopment of T-Building, formerly the Triboro Hospital for Tuberculosis, will provide 200 units of supportive housing for special needs and homeless tenants, as well as affordable housing for low- to moderate-income households in the heart of Jamaica, Queens. The forward commitment of $21 million in permanent financing was secured on behalf of affordable housing developer Dunn Development Corp. T-Building stands out as being the largest 9% Low-Income Housing Tax Credit allocation ever made in New York City. Woodlawn Senior Living is a new 80-unit, age-restricted property located in the Woodlawn neighborhood of the Bronx. The property will provide community space including space designed for tenant-based services. All of the units at Woodlawn Senior Living will be reserved for low-income tenants, with 30 units specifically reserved for formerly homeless residents. The development has been designed to be exceptionally energy efficient and will meet Passive House standards. Merchants Capital secured $10.5 million in funding on behalf of RiseBoro Community Partnership, Inc. Castleton Supportive Housing is a ground-up, 48-unit midrise property located in Staten Island. The ground floor of the development will include a 2,000-square-foot community center to provide services to the local community including financial counseling, public benefits, health education, tutoring, family and legal services, and a food pantry. Castleton Supportive Housing will have 31 units reserved for formerly homeless tenants who will also receive rental assistance via NY 15/15, a New York rental subsidy program. Merchants Capital secured $5.5M in funding on behalf of The Hudson Companies and Project Hospitality.

CARMEL, Ind. (Nov. 19, 2019) – Mortgage banking company Merchants Capital has secured $5.1 million in financing for an affordable housing development in Dade City, Florida – one of the first to close under the Low-Income Housing Tax Credit (LIHTC) Pilot Program. The loan was secured on behalf of Arbour Valley Communities. The 40-year 221(d)(4) New Construction Loan for the development of Arbours at Hester Lake is among the first to use the expanded LIHTC Pilot Program. The U.S. Department of Housing and Urban Development (HUD) revised the program earlier this year to include new construction and substantial rehabilitation projects using Section 221(d)(4) and Section 220 loans. Through the Pilot, the borrower is able to close the loan much more quickly. Instead of waiting up to 150 days to close, this nimble product speeds up affordable financing by reducing the processing time for LIHTC deals. “This is the first loan for Merchants Capital to be approved under the Pilot Program and one of the first to close under the Pilot in the country – and certainly the Southeast region,” said Matt Kaercher, Merchants Capital senior vice president and leading originator on the deal. “We closed this loan just 60 days from submission, proving Merchants’ expertise in the LIHTC realm and our delivery on the program’s mandate by submitting a clean, thorough package to HUD.” Arbours at Hester Lake’s 80-unit community will provide 12 units for tenants at or below 30% Area Median Income (AMI), 50 units for tenants at or below 60% AMI, eight units for tenants at or below 70% AMI, and 10 units for tenants at or below 80% AMI. “We’d like to thank the entire Merchants Capital team, as well as the HUD staff in Atlanta, Jacksonville and the rest of the Southeast region, for their help in making this financing fast and easy for us to seamlessly begin construction of Arbours at Hester Lake,” said Gabe Ehrenstein, principal at Arbour Valley Communities. “Florida faces one of the worst affordable housing crises in the country, and statewide, a person making minimum wage would have to work 84 hours a week to afford a one bedroom apartment at current fair market rent. We are proud to be bringing these much-needed apartments to Dade City residents as an affordable option.” The loan closed this month with Kaercher and Transaction Manager Gus Gilmore as leading originators. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn.

CARMEL, Ind. (Nov 11, 2019) – Leading mortgage banking company Merchants Capital today proudly announces it has relocated its New York City office as part of the company’s strategy to expand its national lending footprint while accommodating current and long-term growth. Located at 777 Third Ave. in Midtown Manhattan, the office is one of Merchants’ four production hubs nationwide, in addition to Indianapolis, Chicago and Saint Paul. The new space provides the company with significantly more space to better meet the demands of its growing workforce within New York City. 777 Third Avenue is a 38-story, class A landmark office tower known for its open public areas and distinctive artwork. “We are thrilled to open our relocated New York office in the heart of Midtown East,” said Michael Dury, President of Merchants Capital. “Building a strong team has been a critical component to our success. Moving into a larger, more collaborative space is crucial to further growing our brand and attracting new employees on the East Coast.” Mathew Wambua, Head of Agency Lending at Merchants Capital, is leading the New York team. His recent production helped catapult Merchants Capital into Affordable Housing Finance’s Top 10 Affordable Housing Lenders for 2018, the highest ranking in company history. Joining Wambua in the new office are Loan Originators Ben Levine and Michael Milazzo. Rounding out the space is the underwriting team led by Chief Underwriter Jessica Cherepski and Deputy Chief Josh Canan, who are each recognized in the industry for their knowledge of complex affordable multifamily underwriting. “Our new workspace will allow our employees to operate in a highly communal and efficient manner while also enabling us to perform even better for our clients,” Wambua said. “This space makes us all the more equipped to utilize the tools at our disposal to directly benefit our clients, including expanding on our commitment to innovation and the efficient closure of multifamily loans through the support from our banking operation, Merchants Bank.” The relocation comes after Merchants Capital’s recent ribbon cutting of its new, 120,000-square-foot headquarters in Indianapolis, as well as the opening of a loan production office in Chicago. Since its inception, Merchants Capital has closed more than $13.8 billion in loans and currently services loans in excess of $10 billion. The company continues to seek driven employees for a number of positions in all four offices.

CARMEL, Ind. (Nov. 4, 2019) – Mortgage banking company Merchants Capital has secured $25.5 million in funding for workforce housing development The Wesmont through a 10 year, Freddie Mac Unfunded Forward Permanent Loan on behalf of TWG Development. Located just north of downtown Indianapolis in the Monon16 neighborhood, The Wesmont addresses the need for quality workforce housing in the heart of the city. The property is being developed in an Opportunity Zone and repurposes a former industrial site. Construction is expected to complete within 18 months. The project is funded through a combination of a conventional construction loan from Merchants Bank of Indiana paired with a forward committed Freddie Mac Non-LIHTC permanent loan. Additional funding sources include a private Opportunity Zone investment of approximately $4.6 million along with approximately $460,000 in Indiana Industrial Recovery Tax Credits. Known as the DINO tax credit, these credits provide an incentive for companies to invest in former industrial facilities requiring significant rehabilitation or remodeling expenses. In addition, the project was awarded a $1.47 million tax abatement which will be realized over 10 years. “Merchants is driven by our passion to provide affordable housing options nationwide,” said Brian Emmons, senior vice president of Merchants Capital and leading originator on the deal. “This loan type offers flexible transaction structuring and certainty of execution at lower costs to borrowers like TWG. Our clients get the financing they need for affordable and workforce multifamily properties funded by public or mission-driven financial investment – whether it’s for new construction or major rehabilitation.” The 188-unit mix will provide 19 units for tenants at or below 60% Area Median Income (AMI), 19 units for tenants at or below 80% AMI and 132 units for tenants at or below 100% AMI. The remaining 18 units are set at market rates. The apartment homes will feature a common lounge area with full kitchen, free Wi-Fi, a 24/7 fitness center, business center and an outdoor pool with private pool deck and grilling area. High-end unit finishes include granite countertops, stainless steel appliances, tile backsplashes, spa-inspired bathrooms and private balconies. “TWG is proud to partner with Merchants Capital and Freddie Mac to bring this mixed-income, workforce housing community to the blossoming Monon16 area surrounding the intersection of 16th Street and the Monon Trail,” said J.B. Curry of TWG Development. “The Wesmont is our third phase of involvement in the redevelopment of this dynamic neighborhood, which has enormous potential to serve every income level of the Indianapolis community.  The first two phases include Monon Lofts, serving a mixed-income tenant base and completed in 2018, and the office build out for Lessonly, Inc., completed this past summer.” TWG Development in partnership with Monarch Private Capital finalized the loan structure and successful closing on Aug. 9, 2019.

CARMEL, Ind. (Oct. 25, 2019) – Mortgage banking firm Merchants Capital has secured $21 million in funding using a Freddie Mac unfunded forward Low-Income Housing Tax Credit (LIHTC) cash loan on behalf of private affordable housing developer Dunn Development Corp. The project – known as T-Building – will comprise the largest 9% Low-Income Housing Tax Credit allocation ever made in New York City. In addition, the financing structure will benefit from a capital stack that includes a significant capital subsidy from New York City’s Department of Housing Preservation & Development (NYC HPD), as well as Bank of New York Mellon, Red Stone Equity and other sources. The funding was secured by Mathew Wambua, Merchants Capital executive vice president, and Michael Milazzo, Merchants Capital vice president of loan originations. Formerly the Triboro Hospital for Tuberculosis, T-Building will provide much needed affordable and supportive housing in the heart of Jamaica, Queens. The historic renovation of the property has begun and is anticipated to be completed by July 2021, with lease-up beginning in August 2021. “We are proud to continue supporting projects that allow homeless families to live in dignity,” said Wambua. “Securing the largest allocation ever made in New York City is a great achievement for the development team and we look forward to assisting with projects that serve an immediate need in our community.” The 200-unit development will provide a mix of supportive housing for special needs and homeless tenants, as well as affordable housing for low- to moderate-income households. “Dunn Development Corp. is thrilled to be the custodian of this historic building and to be partnering with Merchants to give it new life,” said Martin Dunn, president of Dunn Development Corp. “Not only are we turning this 1938 hospital into critically needed homes for formerly homeless, low and middle-income New Yorkers, we are restoring an architectural gem that will enhance the entire neighborhood.” T-Building will feature an attended lobby, on-site social services offices, two community rooms, a restored library and computer room, an exercise room, a laundry room, indoor bicycle parking, roof terraces and an outdoor children’s play area. The site also includes a surface parking lot with approximately 100 spaces. Replicating the success of other integrated supportive housing projects developed by Dunn Development Corp., T-Building will feature on-site services and 24-hour front desk coverage provided by CAMBA, a premier non-profit, supportive housing service provider.