Dealmaker: Merchants Capital Arranges $83M

Merchants Capital, Carmel, Ind., secured $82.9 million in financing for a Cincinnati mixed-use property and affordable housing in Joliet, Ill.

Merchants arranged $57 million through a HUD 221(d)(4) loan for 4th & Race, a mixed-use property coming to downtown Cincinnati in 2021. Flaherty & Collins Properties, Indianapolis, received the 40-year loan.  

When completed, 4th & Race will have 264 market-rate units. The new construction loan was for the multifamily component of a larger development that will also include 20,000 square feet of retail space and a five-story parking garage.

Flaherty & Collins Properties worked with the City of Cincinnati, the Port Authority of Greater Cincinnati and the Cincinnati Center City Development Corp. in a public-private partnership. Merchants timed the closing date so the construction teams could easily move from the garage construction to the residential construction.

Merchants also secured a $25.9 million Fannie Mae Cash Preservation loan for Brinshore Development, The Richman Group and Eric Richelson secured by Larkin Village, a 476-unit multifamily affordable housing property in Joliet.

Located at 947 Lois Place, Larkin Village operates under a tax credit program through the Illinois Housing Development Authority, which requires the property reserve 256 of its units for renters at or below 60 percent of area median income.

The transaction allowed the ownership team to retire IHDA debt, make repairs to the property and redeploy equity. They plan to use the equity to invest in other affordable housing properties either through new construction or renovations.