A local affordable-housing group is spending at least $30 million to buy and rehab most of Zender Realty’s 16-building apartment portfolio.
The not-for-profit Merchants Affordable Housing Corp. is in the final phase of securing financing to acquire 10 buildings and hopes to close on the deal by early July, said Janine Betsey, the organization’s executive director.
The buildings are downtown and on the near-north side.
“They’re some of the last buildings within key high-end residential neighborhoods where we can preserve affordable housing,” she said.
Local apartment developer Barrett & Stokely is acquiring the six remaining apartment buildings in the Zender portfolio, said Tim Zender, who operates the Zender Family Limited Partnership along with four brothers and sisters.
Merchants said the Zender buildings it will renovate first are The Windsor at 1235 N. Delaware St., Jordan at 1445 N. Delaware St., Sherwood Terrace at 1304 N. Delaware St. and Barbee at 1215 N. Pennsylvania St.
The group plans to invest about $5.9 million to rehab 219 units spread across the four buildings. Work should start in late summer and last up to 16 months, Betsey said.
Renovations will include kitchen and bathroom remodels, door replacements, electrical upgrades, roof repairs, new flooring and improvements to the common areas.
“The ones that we’re doing immediate repairs to are 65 to 75 years old,” Betsey said. “They just haven’t had upgrades in a number of years.”
The six additional apartment buildings that Merchants is buying from Zender are The Admiral at 3025 N. Meridian St., Marblehead at 3310 N. Meridian St., Marleigh at 1434 N. Delaware St., Harrison at 1230 N. Delaware St., Rotherwood at 1503 N. Pennsylvania St. and Walbrook at 1102 North College Ave.
About 70 of the 282 units in the six buildings will be rented at market rate, Betsey said.
Merchants is seeking tax-exempt bonds issued by the city of Indianapolis and federal tax credits issued by the Indiana Housing and Community Development Authority to finance the acquisition and repairs.
Its application for federal assistance is set to be reviewed on May 28 while the City-County Council is slated to consider the bond issue June 8, Betsey said.
With the acquisition, Merchants will more than triple its number of properties. The not-for-profit formed in 1987 and operates four apartment buildings.
Zender first listed the buildings in August 2012 without a price. The company had the portfolio under contract once before, but the potential buyer couldn’t complete the deal, Zender said.
Local affordable housing developer TWG Development LLC looked at the properties but ultimately chose not to pursue them after deciding some of the buildings were too small for the company’s liking.
“They’re great properties in great locations,” TWG CEO Joe Whitsett said. “I like the fact that Merchants is buying them.”
TWG partnered with Merchants on the Merici project that converted an old barracks building on Lawton Loop at the former Fort Benjamin Harrison into 21 units for the developmentally disabled.
The 16 properties in the Zender portfolio have a total of 873 units and are mostly on North Delaware, North Meridian and North Pennsylvania streets. Some were built in the 1920—or earlier—and have never been renovated, while others were constructed in the 1950s and rehabbed in the late 1980s.
Zender said the decision to sell is motivated more by personal reasons than by any rush to cash in on the booming downtown apartment market. The five partners all want to explore different interests.
The Zenders’ parents, Jim and Grace, are no longer involved in daily operations but have an interest in the portfolio. Jim bought his first apartment building in 1970 and handed the reins to his children about 20 years ago.