Developer Jonathan Rose is getting into the bridge lending business.
The company’s finance division, Rose Community Capital (RCC), has launched its new Impact Bridge Lending program hwith a $15 million deal in La Puente, CA.
The short-term bridge financing will fund the acquisition of Sunny Garden Apartments, a 96-unit affordable and senior multifamily property (pictured top), on behalf of Alliance Property Group Inc. (APG) and Community Revitalization & Development Corporation (CRDC), a non-profit corporation. Marcus & Millichap’s Joshua Ross and Eli Appel represented the buyer and seller.
The financing represents the first loan to close under the new program, aimed specifically at preserving existing affordable housing through the origination, underwriting and placement of FHA insured multifamily mortgages,
“We’ve worked closely with our funding partner, IMPACT Community Capital, to structure a bridge lending initiative that will help secure the affordability of Sunny Garden, and similar projects, well into the future,” said Kelly Boyer, president of Rose Community Capital.
“At this project, most residents have household incomes at or below 30 percent AMI and would face economic displacement if the project was converted to market rate. This acquisition and the placement of public subsidies through the County of Los Angeles have insured that Sunny Garden Apartments remains affordable for current and future residents.”
Subordinate debt was provided by Century Housing Corporation.
The developer plans an $18 million improvement program at the property built in 1992 at 13712 Sunkist Drive. The project sponsors will work with Partner Energy and Musser Architects, Inc. to achieve as many energy efficiencies as possible at Sunny Garden and meet the California Green Building codes.
In addition, the developer has elected to design improvements to achieve a 20 percent improvement over the property’s baseline energy usage. These design elements will include EnergyStar appliances; low flow toilets and shower heads; water conscious landscaping; LED lighting; solid surface countertops and cabinets; and other energy efficient measures.
The development will be repositioned by a Federal Housing Agency (FHA) debt and equity execution structured by RCC, an FHA specialist.
The County of Los Angeles supports the project and is making available project-based vouchers that will cover 92.6% of the apartments. RCC is arranging permanent financing through a FHA 221(d)(4) loan in the amount of just over $20 million and the new owners have applied for an award of 4% Low Income Housing Tax Credits (LIHTCs) totaling nearly $7.9 million and a loan from the Los Angeles County Development Authority (LACDA) of more than $2.1 million.
Jonathan Rose Companies has been in the lending business for more than five years when it acquired the FHA lending arm from Forest City along with their affordable housing, management and title company businesses in 2015 and has completed more than $400 million in loans.