Merchants Capital Provides $59M Toward Maryland Affordable Housing Project
By Nick Trombola September 25, 2024 2:00 pm
reprints
More affordable housing is needed pretty much everywhere these days, and the developer behind a project to convert nearly 200 market-rate apartments in central Maryland into affordable units has landed the funds to do just that.
Los Angeles-based MRK Partners has secured about $59 million in financing toward the renovation of Amber Commons, a 198-unit multifamily building in Gaithersburg, Md. Financial services firm Merchants Capital provided the financing, which is split between a $37.7 million Freddie Mac (FMCC) tax-exempt permanent loan and a $21.3 million equity bridge loan from Merchants Bank, according to Merchants Capital.
Built in 1968 and gut-renovated in 2009, Amber Commons features 17 three-story garden-style buildings and is located at 7 Prism Place. MRK, together with SKS Realty Partners, acquired the property in 2022 from RST Development for $51.5 million, with the intention of converting it into fully affordable housing with an average rent restriction of 60 percent of the area median income.
MRK plans another extensive rehabilitation of the property, including adding new roofs, windows and flooring; replacing HVAC condensers and furnaces; improving accessibility; and upgrading kitchens and bathrooms.
“Amber Commons is expanding the amount and quality of affordable housing in Gaithersburg with these upgrades, which are on par with, and in some cases surpass, the current housing comparables in the market area,” Ayanna Grasty, vice president of originations at Merchants Capital, said in a statement.
The project is expected to finish by August 2025.
“We are deeply proud of the transformation of Amber Commons from a market-rate property to affordable housing, providing 198 affordable units for at least the next 30 years,” said Sydne Garchik, founder and president of MRK Partners. ”The comprehensive renovation underway … will provide upgraded units, energy-efficiency updates and enhanced community spaces.”
The project is similar to one in nearby Silver Spring, Md., where 170 market-rate units acquired by the True Ground Housing Partners (formerly Arlington Partnership for Affordable Housing) late last year also got the affordable housing conversion treatment. The group plans to add more than 1,000 more units to the community over the next several years.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
