Love Funding, Washington, D.C., closed a $15.3 million loan to renovate a city block in downtown Cleveland to accommodate a new loft apartment community.
When completed, West 25th Street Lofts will offer 83 market-rate loft apartments in four adjacent buildings in Cleveland’s Ohio City neighborhood, including one constructed in 1866 to house the Jacob Beahr Brewery.
Love Funding Midwest Regional Director Bruce Gerhart secured the financing through HUD’s 221(d)(4) loan insurance program and federal and Ohio state historic preservation tax credits. HUD’s program provided the development team with low-rate non-recourse financing for construction and a subsequent 40-year term. The project also tapped two City of Cleveland funding programs.
The loan was slated to close last year but a charter school in one of the newer buildings closed, which allowed the development team to add another 22 units to the project, Gerhart said. Since then, the immediate area benefited from further development and USA Today named the area a top-10 up-and-coming neighborhood nationwide.
Rick Foran, owner of Foran Group Development LLC, Cleveland, led the project development with Smythe Property Advisors LLC President Christopher Smythe.
The building formerly housed a metal shop operated by The Riester and Thesimacher Co., The Phoenix Machine Co., Lester Engineering Co. and the Cuyahoga Metropolitan Housing Authority.
Love Funding also closed a $5.5 million loan for Wesley Housing Corp. of Memphis, which acquired and renovated Wesley Highland Meadows Apartments, a 200-unit Section 8 apartment community in Memphis, Tenn.
Love Funding Senior Director William Jones Jr. secured the financing through a HUD pilot program that expedites loan applications that tap low-income housing tax credits for affordable apartment communities. The non-recourse loan enabled the borrower to lock in a low interest rate for the duration of the 35-year term, he said.
As part of the purchase agreement, Wesley Housing will renew the property’s Section 8 contract for an additional 20 years, Jones said.
Source: MBA NewsLink