PNC Real Estate has provided equity, a bridge and construction loan, and a Freddie Mac Tax Exempt Loan Forward Commitment for Madison Way Apartments, LLC. With DevCo, Inc. as sponsor, the new community comprises 180 affordable units in nine buildings, located in suburban Lynnwood, Washington, just north of Seattle.
DevCo, Inc. specializes in both larger affordable and market-rate apartments and realized that PNC Real Estate’s experience with affordable housing and ability to provide a single source of financing would be a major advantage as they planned a new affordable community.
The Madison Way unit mix includes 32 three bedroom units, 56 four bedroom units and 4 five bedroom units. It is designed for households earning 60% of area median income with 36 units set aside for persons with disabilities and 36 units for large households.
DevCo has consistently built their affordable housing developments to the same standard as their market-rate housing, with particular sensitivity to families’ needs for space. The project incorporates large community rooms, an indoor basketball court and an exercise room.
Situated in the middle of a single-family neighborhood and adjacent to an attractive wetlands area, Madison Way faced a number of challenges during the permitting process.
One of the solutions proved to be an elevated road that minimized traffic through neighborhood streets while protecting the wetlands. Although this design solution presented the developer with potential time delays, working together with PNC Real Estate and other deal participants, the transaction was able to close and fund, keeping the delays to a minimum.
In discussing the project, Jack Hunden, President, DevCo, Inc. noted, “PNC Real Estate understood our unique situation. They identified a solution that allowed us to fix the permanent interest rate and start our construction loan before receiving our final approvals for the vertical portion of construction, so we could lock in our costs and start the site work. They helped us meet our financial objectives and our goals of building an attractive affordable development while being a good neighbor to the surrounding community.”
Date: May 2016
Location: Lynnwood, Washington
Equity Amount: $11.9 million
Bridge Loan Amount: $7.1 million
Construction Loan: $27.5 million
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