Merchants Capital has announced the closure of a combined loan and equity financing of US$102 million to finance the renovation of Granada Homes, a historic affordable housing property located along downtown San Antonio’s famed River Walk. The 14-story mixed-use facility, which was built in 1927 as the Plaza Hotel, is now home to low- and very low-income seniors. Granada Senior Apartments has 265 studio and one-bedroom apartments. The extensive remodeling plan includes enhancements to the finishes and services of all apartments, all of which are particularly tailored to fulfill the needs of seniors. The renovation will also increase the supply of affordable housing by converting unused commercial space into affordable flats.
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The financing for the project includes a $43 million Merchants Bank of Indiana construction loan and $35 million in Merchants Capital syndicated tax credit equity. Merchants Capital also secured a forward commitment for $24 million from Fannie Mae for permanent financing with the mortgage-backed security being purchased by the AFL-CIO Housing Investment Trust (HIT). The innovative financing included one of the first executions of a new financial structure created by the HIT called a “Build to Bond,” which ensures that the project will be constructed with 100% union labor.
Financing Renovation of the Granada Homes
“In a first-of-its-kind financing structure in collaboration with the AFL-CIO, the Merchants Capital equity team was thrilled to contribute US$35 million in federal historic, state historic, and federal low-income housing tax credit equity financing to rebuild this neighborhood.” “Our nimble financing structure enabled the project to close in record time, further solidifying Merchants as a single-point of execution for all aspects of debt and equity financing for affordable housing projects across the United States,” said Julie Sharp, senior vice president of tax credit equity at Merchants Capital.
“We are excited for the partnership with Merchants and the AFL-CIO and look forward to enhancing and expanding affordable housing and good union jobs in San Antonio alongside our partner, Granada Trades Council Housing (GTCH),” said Victor Atkins and Pat Biernacki, principals of Canopy, the developer working on the redevelopment with GTCH.
