Mandel Group Inc. announced that it will hold a groundbreaking ceremony on Feb. 16 for the second phase of its North End development.
Mandel Group also announced that it has closed on the financing for that project and on for its LightHorse | 4041 mixed-use development in Shorewood.
The North End is a multi-phase development by Mandel Group along the Milwaukee River at Water and Pleasant streets in downtown Milwaukee. The first phase of the project, completed in 2009, was a five-story building with 83 apartments and 12,000 square feet of retail space. The second phase of the North End, to break ground on Feb. 16, will have 155 apartments, of which 20 percent will be offered at “affordable” rents. It will consist of two buildings, one along the river and the other along East Pleasant Street.
The LightHorse | 4041 project is a mixed use development on Oakland Avenue in Shorewood. The 6-story building will have 84 apartments, including 20 percent which will be offered at “affordable” rents, and an 18,000-square-foot Walgreens store. That project will also begin construction this month. RE Enterprises LLC is a co-developer for the project.
Mandel Group said that the Wisconsin Housing and Economic Development Authority (WHEDA) recently completed the sale of $54.6 million of tax-exempt Midwest Disaster Area Bonds to private investors. The proceeds of the bond offering are being used to fund the first mortgage loans for the North End’s second phase and the LightHorse project. An additional $7.75 million of tax-exempt bonds was placed directly by Mandel Group with private investors.
Like many developers, Mandel Group has had to be more creative in putting together financing for projects since bank financing for developments has become extremely tight since the Great Recession.
“This was one of the more involved financings we’ve completed thus far, indicative of the challenges with capital formation in the real estate space” said David A. Pavela, chief financial officer for Mandel Group, Inc. “None of the larger real estate transactions in the market involving new construction have been able to fund without some form of enhanced debt and equity sourcing, originating through public or quasi public involvement in the private real estate marketplace.”
The North End project will be built by Ray Hintz/CAS Construction Services. LightHorse | 4041 will be built by Pewaukee-based VJS Construction Services Inc. Both projects were designed by Engberg Anderson Design Partnership.
