Walker & Dunlop Arranges $29.6 Million in LIHTC Equity for Canyon Creek East
Walker & Dunlop has successfully arranged $29.6 million in federal Low-Income Housing Tax Credit (LIHTC) equity for Canyon Creek East, an affordable housing project in Lenexa, Kansas. This development will include 212 multifamily units across five buildings, offering one-, two-, and three-bedroom units for diverse households. The financing will cover approximately 40% of the total development costs.
The project is part of the Cedar Canyon West development plan, aiming to provide affordable housing for households earning 30% to 80% of the area median income (AMI). Canyon Creek East is strategically located near major employers and schools, enhancing residents' access to employment and education. Walker & Dunlop's Affordable Equity team, led by Jennifer Erixon, played a important role in securing this financing, marking their sixth transaction with MRE Capital.
- Walker & Dunlop arranged $29.6 million in LIHTC equity for Canyon Creek East.
- The project includes 212 multifamily units across five buildings.
- LIHTC equity finances approximately 40% of the total development costs.
- Canyon Creek East will provide affordable housing for households earning 30% to 80% of the area median income (AMI).
- The development is part of the broader Cedar Canyon West plan, which includes residential, commercial, and recreational facilities.
- Strategic location near major employers and schools enhances access to employment and education.
- This is Walker & Dunlop’s sixth transaction with MRE Capital.
- None.
Insights
Walker & Dunlop's arrangement of $29.6 million in LIHTC equity for Canyon Creek East is a noteworthy development, especially given the importance of affordable housing in today's market. The LIHTC program, which provides tax incentives to developers for building affordable housing, is a critical tool in addressing housing shortages. For investors, the arrangement of such financing indicates Walker & Dunlop's robust capabilities in the affordable housing sector, demonstrating their proficiency in securing essential funding.
Given that the financing covers 40% of the total development costs, it shows that the project has secured substantial backing, which can reduce financial risks associated with the development. This is important for investors assessing the risk-reward profile of such projects.
Additionally, the long-term nature of LIHTC projects, where tax credits are allocated over a 10-year period, may provide a stable, albeit gradual, return on investment. However, investors should also be aware that affordable housing projects often come with regulatory challenges and complexities that can impact timelines and costs.
The market demand for affordable housing, particularly in regions like Lenexa, Kansas, underscores the relevance of projects like Canyon Creek East. With the press release highlighting full occupancy and waitlists for similar LIHTC projects, it's clear that there is a significant demand-supply gap in the affordable housing market. For retail investors, this implies a potential for steady occupancy rates and rental income once the project is completed.
The project's proximity to major employers and a reputable school district further enhances its appeal. These factors can drive high rental demand and contribute to the project's overall success. Additionally, being part of a broader development plan that includes residential, commercial and recreational facilities can create a more appealing living environment, which is likely to attract tenants.
Understanding the local market dynamics and demand for affordable housing can help investors gauge the long-term viability and profitability of such investments. However, they should also consider broader economic factors that might affect employment rates and income levels in the area.
Canyon Creek East (Photo: Business Wire)
Canyon Creek East, envisioned as an expansion of the spectrum of residential housing available in
The Walker & Dunlop Affordable Equity team, led by Jennifer Erixon, arranged the federal LIHTC equity, which will finance approximately
“This financing represents a significant milestone in our mission to foster inclusive and sustainable communities," said Jennifer Erixon, senior managing director of originations at Walker & Dunlop. "Canyon Creek East exemplifies our commitment to providing affordable housing solutions that enhance the quality of life for residents and contribute to the economic vitality of the region.”
Canyon Creek East is part of the broader Cedar Canyon West development plan, which encompasses a mix of residential, commercial, and recreational facilities. MRE’s development will provide affordable housing options to the community with units targeting households earning between
“With LIHTC projects in the market boasting full occupancy and waitlists, Canyon Creek East is poised to address the growing demand for affordable housing options while contributing to the overall prosperity and well-being of the residents of
Walker & Dunlop’s Affordable Equity team (formerly Alliant Capital) is part of Walker & Dunlop’s broader affordable housing platform and is one of the nation's largest LIHTC syndicators. Today, the Affordable Equity team’s portfolio exceeds
About Walker & Dunlop
Walker & Dunlop (NYSE: WD) is one of the largest commercial real estate finance and advisory services firms in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240624325617/en/
Investors:
Kelsey Duffey
Investor Relations
Phone 301.202.3207
investorrelations@walkeranddunlop.com
Media:
Nina H. von Waldegg
VP, Public Relations
Phone 301.564.3291
info@walkeranddunlop.com
Source: Walker & Dunlop, Inc.
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