Dealmaker: D2 Capital Advisors Arranges $18M in Construction Financing

D2 Capital Advisors, Philadelphia, arranged $18.2 million in construction financing for a 47-unit affordable housing property in Aurora, Ill.

D2 Capital Advisors Vice President Jack Cortese and Chief Operating Officer David Frankel secured the financing for Fox Valley Apartments LP, a joint venture that includes Visionary Ventures NFP, Itasca, Ill.

The affordable workforce housing redevelopment encompasses the adaptive reuse of two vacant historic school sites in the City of Aurora, the former Mary A. Todd School and Lincoln Elementary School.

The Todd School at 100 Oak Avenue sits within a Qualified Opportunity Zone. It will include 11 new housing units and a health clinic for low-income families. The Lincoln school at 641 S. Lake Street will include 14 new housing units. Both schools sit in an Illinois Rivers Edge Redevelopment Zone. Additionally, a new two-story building will be constructed with 22 new housing units.

Of the 47 units, at least 30 percent will be for renters earning 30 percent or less of area median income and the remaining units will be for renters at 60 percent of area median income. The project was awarded 9 percent Low Income Housing Tax Credits by the Illinois Housing Department Authority and also qualified for state and federal Historic Tax Credits.

D2 Capital Advisors sourced a construction lender that was able to bridge both the 9 percent Low Income Housing Tax Credit equity and the Historic Tax Credit equity while also providing fixed-rate construction-to-permanent financing.

“We garnered a lot of interest for this deal and provided a one-lender solution that allowed for maximum flexibility on the exit.” Cortese said. “We also locked in the rate at term sheet execution, which proved to be extremely valuable given the current rate environment and the time that it took all parties to get closed.”