Colorado Real Estate Journal - February 21, 2018
Colorado Business Bank recently funded a $25.6 million senior secured construction facility for the development of a transit-oriented multifamily development at the Peña Station light-rail station near Denver International Airport. J. Rhett Nunnally arranged the loan for developer MGL Partners for the $43.3 million development of the 218-unit community, which will be part of the 383-acre Peña Station Next project. The overall development plan for the area includes up to 1.78 million square feet of office space, 1,085 hotel rooms, 3,825 residential units, 668,000 sf of retail and 58 acres of open space. The development of Peña Station and the subject financing exhibit the complexity often required to deliver affordable housing in today’s market and the creativity and collaboration necessary to effectively capitalize the investment, noted Nunnally. The bank group was augmented by VectraBank Colorado, which was a significant participant in the loan. Additionally, multiple quasi-governmental entities provided subordinate debt tranches. Further, the developer elected to obtain a permanent loan forward commitment, which was provided by The Federal Home Loan Mortgage Corp. via Prudential Affordable Mortgage Company LLC. The developer’s joint-venture partner was a division of Prudential Financial Inc. It was a 15-month process to finalize entitlements, obtain equity commitments, source and structure the subordinated debt tranches, and then finally to complete the underwriting and documentation of the senior secured debt facility. The Peña Station community will comprise 75 percent market rate and 25 percent affordable (80 percent area median income) units. The apartments will be situated in six three- story buildings of wood-frame construction with surface and attached tuck-under and breezeway- access garages, a fitness center, swimming pool, spa, two-story clubhouse with business center, game area, co-work offices, bike/ski maintenance, dog wash, second-level terrace overlooking the pool and a conference room. Apartments will include balconies or patios, washers and dryers, microwaves, ice maker refrigerators, quartz countertops and stainless steel finish appliances. Some units will include island kitchens, built-in shelves or double lavatories. Other News Love Funding, a leading provider of FHA multifamily, affordable and health care financing, closed a $13.7 million loan for the construction and permanent financing of the second phase of Outlook Ridge, a market-rate multifamily community in Pueblo. The financing was secured by Love Funding Senior Director Peter Wessel through the U.S. Department of Housing and Urban Development’s 221(d)(4) loan insurance program. Wessel previously secured HUD funding for the first phase of development. The new construction will consist of five three-story garden style buildings joining five similar apartment buildings constructed during the first phase of development in 2014. The new buildings will house one-, two- and three- bedroom apartments, and all 10 buildings will share high-end community amenities. N.E. Construction LLP is leading the development of the community, and the property was designed by Godden Sudik Architects and managed by RSP Ltd. The property is located at Outlook Boulevard and Ridge Drive. The Colorado Housing and Finance Authority invested a record $2.36 billion into affordable housing for Colorado in 2017, including the development or preservation of more than 6,000 units of affordable rental housing and helping more than 8,000 Coloradans become homeowners – the highest levels yet according to CHFA, which was created in 1973. “CHFA is a mission-based organization, so our production growth is directly aligned to the growing needs of those we serve,” said Cris White, executive director and CEO for CHFA. “In the last three years, CHFA’s investment in affordable housing has increased 182 percent compared to 2011 through 2013, with 2017 being our most historic year yet in terms of production. This demonstrates that demand for affordable housing options in Colorado, whether purchasing or renting, is at an all-time high. CHFA is pleased to play a role in meeting this demand, and help as many Coloradans as possible, because everyone should have the opportunity for housing stability and economic prosperity,” To support the development or preservation of affordable rental housing in Colorado, CHFA is Colorado’s allocator of federal and state low-income housing tax credits and also offers financing to developers. In 2017, CHFA awarded $53.2 million in state and federal LIHTC to support 4,397 units of affordable rental housing that will be built or preserved by undergoing renovations. This represents the most units supported by LIHTC in any single year of CHFA’s history. Additionally, CHFA invested $363.3 million in multifamily financing, bringing the total number of units supported in 2017 with either loans or LIHTC to 6,217 – setting a new benchmark for total units supported by CHFA in one year. “CHFA will continue to work with our communities and housing partners in 2018 and the years ahead to help make Colorado a more affordable place to live. Identifying ways to leverage and increase resources for both for-sale and rental housing is key, along with preserving existing affordable rental housing stock. Housing stability is necessary to everyone’s wellbeing and we must continue to provide viable options to Coloradans, especially at a time when they need us the most,” added White.