Dealmaker: Merchants Capital Secures $110M for Washington, D.C. Mixed-Use Workforce Housing
Merchants Capital, Carmel, Ill., secured $110 million in financing for Parkside 8 and Parkside 10, two mixed-use workforce housing developments in Washington, D.C.
Upon completion, Parkside 8 and 10 on Kenilworth Terrace NE will have 230 total residential units and 14,000 square feet of retail space. City Interests Development Partners, Washington, D.C., and Ravinia Capital Group, Northbrook, Ill., are co-developing the properties; they closed on joint venture equity with an Opportunity Zone strategy managed by Bridge Investment Group, Salt Lake City, Utah.
Parkside 8 and 10 will become part of Parkside, a 3.1-million-square-foot master-planned development. The 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 over Kenilworth Avenue and I-295 to the Minnesota Avenue Metrorail station.
“Workforce housing is such an important component of a city’s housing plan as it supports employment populations that are critical in making the city operate. We need teachers, fire fighters, members of the police force and government employees living and working in our communities,” said Peter Farrell, Managing Partner at City Interests Development Partners LLC. “Adding Parkside 8 and 10 to our mixed-income housing footprint is another step in the evolution of Parkside as a live, work, play mixed-use development.”
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 Forward Commitments and Freddie Mac Permanent Loans.
“Housing affordability remains a challenge, and the Parkside developments will benefit community members of Ward 7 who would not otherwise be able to afford the high cost of living in Washington D.C.,” said Lee Oller, Executive Vice President of Merchants Capital’s Chicago office. “Our partnership with Freddie Mac allowed us to structure a complete financing solution using their non-LIHTC program for permanent debt.”