Tredway has secured $41.5 million in acquisition and construction financing from Merchants Capital to purchase and renovate Restore Housing, a 138-unit affordable apartment complex in Brooklyn. Tredway is adding $10 million of its own capital to the project, bringing total investment to over $51 million for the property, which opened over 40 years ago.
The deal preserves affordability at the Brooklyn complex, keeping units available for low-to-moderate income residents. Merchants Capital's role as lender reflects broader activity in the affordable housing finance space, where traditional lenders continue backing preservation projects that maintain existing stock rather than allow properties to convert to market-rate housing.
For tenants at Restore Housing, the renovation work promises upgrades to aging systems and units while protecting their current rents. Many affordable properties built in the 1980s face deferred maintenance issues, and capital improvements address both physical deterioration and code compliance.
Tredway's $10 million equity injection demonstrates the developer's confidence in the Brooklyn market and its commitment to long-term affordable housing operations. The combination of debt and equity financing is standard for preservation deals, where acquisition costs and renovation budgets exceed typical single-family or market-rate development projects.
For the broader Brooklyn market, this transaction represents continued institutional investment in affordable preservation. As market-rate rents climb in the borough, properties like Restore Housing function as anchors for income-restricted households. The 138-unit portfolio generates stable rental income while serving a critical housing need.
New York City's affordable housing crisis continues driving lender activity in preservation deals. Projects that rehabilitate existing stock rather than construct new buildings often move faster and require less complex approvals than new development. Merchants Capital's willingness to fund this $41.5 million deal signals confidence in Brooklyn's affordable housing economics despite broader market volatility.
The property