Waterfront Station

Merchants Capital Provides $141M Financing for Mixed-Income Multifamily Development in Southwest D.C.

by Julia Sanders

WASHINGTON, D.C. — Merchants Capital has provided more than $141 million in financing for Waterfront Station II, a mixed-income multifamily development currently under construction in the Southwest neighborhood of Washington, D.C. The development team is a joint venture between Hoffman & Associates, AHC Inc., City Partners and Paramount Development. Construction is slated for completion by winter 2023.

Situated at 1000 4th Street SW, Waterfront Station II will have 449 apartments, including 313 market-rate units, 68 units affordable to households earning 30 percent of the area median income (AMI) and 68 apartments affordable for households earning 50 percent of AMI.

The development will include a single, 12-story apartment building with approximately 29,000 square feet of retail, educational and commercial space on the ground level with below-grade parking. The commercial tenants include AppleTree Public Charter School, a D.C.-based early childhood education provider, as well as a neighborhood restaurant by Good Company Doughnuts. The project has an additional 7,000 square feet of retail space available for lease.

Designed by architect Torti Gallas Urban with interiors by Hickok Cole, the project will include more than 19,000 square feet of outdoor and interior amenity space across four floors. Community amenities will include a coworking and communal gathering space, rooftop terrace and pool, second-floor courtyard, fitness center and both entertainment and hospitality lounges with dedicated meeting spaces and a library. Waterfront Station II is designed to achieve LEED Gold certification through sustainable features such as solar panels.

The affordable housing units were financed using both 4 percent and 9 percent Low-Income Housing Tax Credits (LIHTC). Ninety-four of the total affordable units are attributed to the 4 percent LIHTC while 42 are 9 percent LIHTC. In 2020, the Waterfront Station II development team acquired the project land and executed a 99-year ground lease with the District’s Office of the Deputy Mayor for Planning and Economic Development (DMPED).

Merchants Capital financed the property with three Merchants Bank of Indiana (MBI) construction loans, including a $123.5 million loan, a $2 million loan for the construction of the 9 percent LIHTC units and a $15.4 million 4 percent LIHTC loan required for the tax-exempt bond financing.

In addition, Merchants Capital provided financing for three separate Fannie Mae 42-month forward commitments for the permanent financing. Each forward commitment had different loan terms to meet the requirements of the various units, as well as the goals of the borrowers and equity investors.

You may also like