Image courtesy of Broadway Capital
An all-affordable home ownership development under construction in Chelsea used popular public sources to complete its financing package – and an unusual one to secure construction bonds.
Broadway Capital used $2 million in Bitcoin as collateral for its 150 Williams St. project, known as The Quinn. The Chelsea-based developer is building 20 condominiums, all of which will be reserved for households earning 60 to 100 percent of the area median income.
“We are trying to prove out this model and are using this as a pilot study,” Broadway Capital Managing Director Mikael Vienneau said. “As the government moves forward with [cryptocurrency] regulation, there is going to be a framework on how we can source outside investors who want to support affordable housing development.”
MassHousing filled a key portion of the capital stack for The Quinn with a $5.5 million grant through its CommonWealth Builder program, which helps developers complete financing gaps for affordable home ownership projects. Massachusetts Housing Investment Corp. chipped in with a $3.9 million low-interest loan, while Broadway Capital contributed $400,000 in owner equity, Vienneau said.
Although Bitcoin was used as collateral and not part of the main financing package, Vienneau said cryptocurrency has the potential to play a larger role in real estate developers’ ability to raise capital and finance projects.
On June 17, the U.S. Senate approved the GENIUS Act which would provide a regulatory framework and transparency to the cryptocurrency industry. The House of Representatives is debating its own version.
Vienneau foresees eventually building a Bitcoin reserve that the firm could tap into for liquidity on various projects and collect outside investments. Broadway Capital has completed more than 200 multifamily units in the past three years.
“Right now, crypto is dismissed as a speculative asset, and we want to really show we can fund tangible solutions,” Vienneau said.
Site work is under way on the Williams Street property, which previously contained a small commercial building and parking. The complex will contain 20 one-bedroom units, and is scheduled for completion in 2026.
