Jonathan Rose Companies has completed a $20 million refinancing for Court Tower Apartments, a 221-unit senior HUD Section 236 property in Newark, NJ.
The loan will allow the Rose to undertake an $8 million capital improvement program while preserving and expanding affordability for residents.
Located at 1 Court Street near the Prudential Center in downtown Newark, the property was acquired by Jonathan Rose Companies three years ago through their Rose New Jersey Green Affordable Housing Preservation Fund, a joint venture with the Goldman Sachs Urban Investment Group who acts as the sole investor in the fund.
Since then, ownership has expanded affordable opportunities at the asset through the Rental Assistance Demonstration Component 2 (RAD) program.
This program has enabled Jonathan Rose Companies to convert the existing, expired Rental Assistance Payments for a 20-year Section 8 Project-Based Rental Assistance contract for 206 of the units, up from 134.
The increased rents through RAD, set at 110 percent of Newark’s Fair Market Rent, has allowed the company to refinance the project, generating proceeds for significant rehab and greening of about $37,000 per unit.
“We are proud to partner with Jonathon Rose Companies in Newark, where we have committed over $500 million in comprehensive community development across mixed-income housing, schools, retail, fresh food, office space, and community facilities. The successful conversion of Court Tower will not only enhance the quality of this important asset, but it will also ensure its continued affordability for its longtime residents,” said Margaret Anadu, Goldman Sachs managing director who leads the Urban Investment Group.
The refinancing, arranged through Prudential as the Delegated Underwriter and Servicer (DUS) for Fannie Mae, will also fund the remediation of two underground storage tanks at the site. The City of Newark has helped support the project through a long-term tax abatement.