Press Release

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.

CARMEL, IN – Mortgage banking firm Merchants Capital has secured $16 million in construction and permanent financing through a Merchants Bank of Indiana construction loan and a Fannie Mae Mortgage-Backed Security (MBS) as Tax-Exempt Bond (M.TEB) Forward loan. The M.TEB loan, the first ever with Hennepin County Housing and Redevelopment Authority as bond issuer, had the lowest permanent rate to date for the M.TEB program. Fannie Mae’s MBS as M.TEB is considered a “one-size-fits-all” bond solution. By combining the ease of the MBS execution with all the benefits of tax-exempt bonds, borrowers get a lower interest rate and significant savings over the life of the loan. This execution can be used to finance the new construction and rehabilitation of Multifamily Affordable Housing (MAH) properties. Dubbed The Redwell, the affordable mixed-use multifamily development was closed through a partnership with Fannie Mae and Stifel, Nicolaus & Co., Inc. As part of the funding, Merchants Capital also arranged a $1.7 million construction loan with 10-year permanent financing and a $7.9 million Low-Income Housing Tax Credit (LIHTC) Equity Bridge loan for the project on behalf of Schafer Richardson and WNC. The total development cost of the entire project is more than $31 million, with an estimated LIHTC credit equity of $9.1 million and $22.7 million in permanent financing and other funds. “Merchants Capital is thankful to all of the partners involved in this transaction for their efforts in this complex deal,” said Marsha Goff, executive vice president of Merchants Capital. “The unique structure of this loan was an enjoyable challenge for us, and the  ability to close within a tight timeframe to meet bond requirements and also bifurcate the commercial component to meet the LIHTC investor requirements allowed the Schafer Richardson team to break ground on this much-needed affordable housing project.” By leveraging Merchants Capital’s bank, Merchants Bank of Indiana, Merchants Capital was able to structure the funding to provide a small construction loan and accommodate the LIHTC requirements  which allowed the commercial component to remain within the development. Additionally, Tax Increment Financing (TIF) provided by the City of Minneapolis is being monetized to support the proposed permanent loan amount. Hennepin County Housing and Redevelopment Authority acted as the bond issuer. “We are excited to see construction commence after over four years of planning and structuring the deal,” said Amanda Janzen, project manger of Schafer Richardson. “The Redwell was originally planned as an office building, then switched direction to new construction market rate housing, and then affordable housing. The Redwell will be an asset to the neighborhood and provide much-needed affordable housing in the desirable North Loop.” The Redwell is a 109-unit, six-story multifamily complex with commercial space on the first floor. Twenty-six of the units will be studio apartments, along with 68 one-bedroom and 15 two-bedroom units. The Minneapolis Public Housing Authority (MPHA) will provide 22 Section 8 vouchers whereby households would pay 30% of their income toward rent, with the balance paid by federal rental subsidies administered by MPHA.  The remaining units will be priced at 110% fair-market rate at 60% of the area median income (AMI). “We would like to congratulate Schafer Richardson and all the partners who have worked tiressly to add to the North Loop Neighborhood.  WNC is proud to be participating in our second investment with Schafer Richardson in Minneapolis” noted Michael Byrd of WNC & Associates. “These developments are time consuming and difficult to put together. Schafer Richardson did a great job of getting all of the financing and approvals necessary to get the property closed and under construction.” In addition to providing mixed-use, mixed-income and affordable housing in the North Loop District of downtown Minneapolis, the new development is located near mass transit stations and has nearby access to the interstate and intersects several trails and parks along the Mississippi River.

CARMEL, IN – Mortgage banking firm Merchants Capital has provided a construction loan and permanent financing for Spur 16, a 156-unit, mixed-use development in Mequon, Wisconsin. As the lender, Executive Vice President Lee Oller and Senior Vice President Susan Schnoll provided the construction and 40-year, fixed-rate, non-recourse loan through the U.S. Department of Housing and Urban Development (HUD)’s 221(d)(4) program on behalf of Shaffer Development. “Spur 16 is particularly special because its financing and development was led entirely by women,” Schnoll said. “With visionary developer Cindy Shaffer at the lead, this female development and lending team was able to bring the project to life, delivering a beautiful and unique project to the market.” Spur 16 combines the construction of new luxury apartments and high-end townhomes with the repurposing of three original public works buildings into vibrant commercial space, including a public market. The development features a clubhouse with a swimming pool, fire pits, event rooms and a workout facility outfitted with Peloton Bikes. Nestled in the heart of Mequon and within the beauty of nature, Spur 16 also features community gardens and a walking path with access to the Ozaukee Interurban Trail. The apartments and townhomes offer concierge service for residents, including car detailing, dog walking, in-unit package delivery and food delivery. The first Leadership in Energy and Environmental Design (LEED)-certified project in Mequon, Spur 16’s deluxe “Smart Units” will allow tenants to control lights, temperature, music and emergency services. “Working with Merchants Capital as the lender on this project has allowed the creation of an exceptional addition to the Mequon area,” said Cindy Shaffer, owner of Shaffer Development. “Shaffer Development isn’t in the real estate business – we’re in the people business. Spur 16 introduces modern, luxurious amenities to greater Milwaukee residents looking to live in an up-and-coming community.” The development’s Mequon Public Market opened in June 2019 and brought some of Milwaukee’s premier restaurants north. Now 100% leased, market vendors include Anodyne Coffee, Purple Door Ice Cream, Beans and Barley, Screaming Tuna, Café Corazon, Bavette, Bowls, Happy Dough Lucky, Santorini Grill and Terrain. The development also houses St. Paul Fish Company, a retail store, an oyster bar and various indoor and outdoor dining. There is also a wellness building housing the Mequon Club Pilates and Yama Yoga True North.

CARMEL, Ind. (Aug. 23, 2019) – Mortgage banking firm Merchants Capital has secured $21.4 million in funding using a Fannie Mae Mortgage-Backed Security (MBS) as collateral for new Tax-Exempt Bonds (M.TEB), combined with 4% low income housing tax credits (LIHTC). The funding was the first of its kind in the state of Indiana and sourced on behalf of long-time Merchants Capital customer, the Gene B. Glick Company, for the preservation of Carriage House of Evansville, a Section 8 housing development in Evansville, Indiana. The execution utilized publicly-issued tax exempt bonds and 4% tax credit equity, provided by PNC Bank, to fund approximately $11 million in repairs, renovations and upgrades to the community. Carriage House of Evansville dates back to 1978 and is a 100% Section 8 affordable housing community serving tenants at 60% of the area median income (AMI) or less. Fannie Mae’s M.TEB solution provides borrowers with a lower interest rate and significant savings over the life of the loan, offering a loan-to-value (LTV) ratio of up to 90%. This execution can be used to finance the construction, acquisition or rehabilitation of Multifamily Affordable Housing (MAH) properties. “Fannie Mae continues to look for ways to create and preserve affordable housing,” said Angela Kelcher, Director of Affordable Housing at Fannie Mae. “The MBS as Tax-Exempt Bond (M.TEB) execution provides efficient, low-cost financing and we were excited to work with Merchants to support the preservation of affordability while also improving the quality of housing for the residents.” CRG Residential is the general contractor on the project and is performing all renovations at the site. All units are being modernized using CRG’s RAPID program, which completely renovates and modernizes units in just days, limiting disturbance to existing tenants. Updates include new solid surface flooring, cabinetry and countertops, energy efficient light fixtures, appliances, doors and trim, and complete bathroom renovations. “We are excited to partner with Fannie Mae and Glick to preserve much-needed affordable housing in the state of Indiana,” said Michael R. Dury, president of Merchants Capital. “Fannie Mae’s M.TEB program gives access to a lower cost of capital, which allows the development team to substantially renovate the community. As with any project involving Glick, the company’s vision and strategy is first class and at the end of the day, the completion of this project is a win for the tenants, which is wonderful.” Additional Carriage House of Evansville improvements include entry signage, asphalt and storm drainage repairs, roofing, modernized elevators and playground equipment, as well as the addition of a bark park, lakeside picnic area, fitness center and an internet cafe. “We’re grateful for our long-standing relationships with Merchants Capital and Fannie Mae that enable us to undertake renovations like this one at Carriage House of Evansville,” said David Barrett, president and chief executive officer at Glick. “Ultimately, this project illustrates our commitment to our residents – preserving their affordable housing and providing them high-quality apartment homes.”