179-unit Harlem complex fetches $36M
Purchase of the five-building complex is the second for year-old Preservation Development Partners, which aims to buy and preserve affordable housing. A third deal is in contract.
By Amanda Fung @amandafung
Published: January 6, 2012 - 10:39 am
Preservation Development Partners, a year-old firm focused on acquiring and preserving affordable housing across the city, has paid $36 million for East River Apartments, a 179-unit residential complex in East Harlem. The deal is the firm's second to date.
The five building complex, located at 109-125 E. 130th St., at Lexington Avenue, will remain a Section 8 affordable housing development for at least 20 more years, according to Francine Kellman, principal of Preservation Development Partners, which will invest $14 million in repairing and improving East River Apartments. The complex's Section 8 contract was set to expire this year if the new owner did not renew it. The seller had owned the property, which is very close to the Third Avenue bridge over the Harlem River, for 28 years, said Ms. Kellman.
“The previous owner did what he could, but there were a lot of violations on the buildings which we are taking care of,” she said. “The property is beautiful and in a desirable neighborhood. We saw an opportunity to help ourselves and the tenants.”
The $50 million project, which includes both acquisition and development costs, was financed by tax-exempt bonds issued by the city Housing Development Corp. and a Freddie Mac Low Income Housing Tax Credit Mod Rehab program. Wells Fargo also provided some debt and equity financing.
Preservation Development Partners will spend $31,000 per apartment for upgrades. Every apartment will get new kitchens and bathrooms. It will repair or in some cases install new roofs, boilers, compactors, flooring, windows and fa çades. Work on the complex began this week and is expected to be complete within a year, according to Brian Raddock, principal of the firm.
Last year, the firm acquired the 75-unit Trinity Apartments, a Section 8 affordable housing development in the Bronx for $9.8 million and has since completed renovating that property. The firm is in contract to buy its third affordable housing development in the city and expects to close on that deal by June. Preservation Development Partners is a partnership between K&R Preservation and real estate developer BFC Partners.
Article can be found at http://www.crainsnewyork.com/article/20120106/REAL_ESTATE/120109950
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