Mirador Las Casas housing complex to get $26M renovation
The New York office of leading multifamily financier Merchants Capital announced it has secured more than $25.9 million for the renovation and upgrade of Mirador Las Casas, a Section 8 and Low-Income Housing Tax Credit (LIHTC) multifamily development in San Juan.
The project marks a significant return by the Puerto Rico Housing Finance to issuing 4% LIHTC housing bonds, according to Merchant executives.
The property features 294 units across 21 three-story buildings, with a variety of two-, three- and four-bedroom floor plans. Long term Section 8 and LIHTC agreements ensure the extended affordability for the residents of Mirador Las Casas.
The planned renovation will preserve quality living standards, the company said, in addition to providing residents with new amenities and services. Sixteen of the total units will be reserved for people with functional diversity, including three units marked as “sensory accessible” for those with hearing impairments.
Executives said the Mirador Las Casas project “provides critical affordable housing for low-income families of San Juan.” The property is one of 22 owned across the island by local developer and investor Fernando L. Sumaza & Co.
“It has been a [great] experience working with Merchants and the other professionals that made this deal possible,” said Alexandra Domenech, president of Fernando L. Sumaza & Co.
“Merchants’ entry into the Puerto Rico financial market provides new opportunities for the development of affordable housing on the island, and we are glad that they started with our project,” Domenech said. “The Sumaza team is eager to see the families of Mirador Las Casas Apartments enjoying the renovated and modern housing.”
The funding will support an extensive renovation of the property, including in-unit amenity improvements of kitchens, baths, balconies, and installation of in-unit washer and dryer appliances. Additional improvements will include construction of a leasing office, community building, digital library building, basketball court, playground, maintenance building and storage sheds.
New sidewalks will be installed throughout the property, and all parking areas will be resurfaced.
Merchants Capital New York secured a $25.9 million Merchants Bank of Indiana bridge loan on behalf of the property owner. The revolving MBI bridge loan will cash collateralize a $56 million publicly offered housing bond issuance by Puerto Rico Housing Finance Agency and enable the project to comply with federal LIHTC regulations.
LIHTC equity for the project was syndicated by The Richman Group. Bond counsel was provided by Tiber Hudson and bond underwriting by Stifel.
“Merchants was able to provide an innovative cash collateralized structure for Mirador Las Casas. This loan complies with federal LIHTC 50% test requirements and reduces required interest reserve development costs,” said Ben Levine, senior vice president of originations at Merchants Capital New York.
“Providing a cash collateralized financing product in Puerto Rico represents a major milestone for our team and the affordable housing finance industry,” he said.
“Communities in Puerto Rico are still recovering from the devastation of Hurricane María in 2017. We are hopeful that by working alongside the Puerto Rico Housing Finance Agency and the development team for Mirador Las Casas we can make a positive contribution to the Puerto Rican community,” Levine added.
