Granada Homes Get Shot in the Arm with $102M for Redevelopment

Financial services company Merchants Capital recently closed $102 million in combined debt and equity financing to support the redevelopment of Granada Homes, a historic affordable housing property located along the River Walk in the heart of downtown San Antonio. Originally constructed in 1927 as the Plaza Hotel, the property is currently a mixed-use 14-story high-rise housing the underserved low and low-income senior population.

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 percent union labor.

“Completing this transaction in a record 60 days required the focus and attention of multiple disciplines across the Merchants product platform,” said Lee Oller, executive vice president of Merchants Capital’s Chicago office.