Asset management giant Nuveen has partnered Hudson Valley Property Group LLC (HVPG) to buy a 412-unit affordable apartment portfolio in Jersey City.
The venture paid $127 million for the the assets, which were sold by a local, family-owned business.
The four properties are subsidized through US Department of
Housing and Urban Development (HUD) project-based Section 8 contracts.
They are Van Wagenen I Apartments (233 units), Van Wagenen
II Apartments (114 units), Bergen Manor (40 units) and Kennedy Manor (25
units).
The acquisition is the first phase of a $145 million social impact investment the partners said will help preserve New Jersey’s aging supply of affordable housing without relying on limited state public funds.
“The previous owners and their dedicated team took great pride
in providing much needed affordable housing for families throughout New Jersey,”
said Jason Bordainick, managing partner, HVPG.
“We are excited to be able to build upon their legacies, and
to further enhance the properties while preserving affordability for decades to
come. We look forward to working closely with the City of Jersey City, NJHMFA,
HUD and the management staff to maintain each of the properties as quality
affordable housing for these New Jersey communities.”
Pamela West, senior director, Real Estate Impact Investing
at Nuveen, added, ”We look forward to continuing our mission of preserving
affordable housing while investing in these units by improving services and
implementing energy efficiency in an increasingly high cost area.”
The partners said upgrades to the properties will include “reimagining
the building access to create a more opulent entry with next generation access
control,” along with modern elevators and boiler
No residents will be
displaced as a result of this sale, and all Section 8 income-qualified
residents will continue to pay 30 percent of their annual income in rent.
HVPG is a New York City based affordable housing
preservation firm that owns over 5,500 units of low and moderate incoming
housing across the East Coast.
HVPG is manager of a CRA (Community Reinvestment
Act)-eligible private equity fund, Hudson Valley Preservation Fund (HVPF),
focused on the acquisition and preservation of affordable housing.
Equity capital for the portfolio transaction was provided by
HVPF and Nuveen. The debt was funded through a customized debt facility
structured by Walker & Dunlop and Fannie Mae.
The New Jersey-based property management company, Community
Realty Management, assumed operations while retaining a majority of the
existing management staff at each of the sites.
The law firms of Nelson Mullins Riley & Scarborough, Nixon Peabody, Berman Indictor and Paul Hastings represented the joint venture in the transaction.
SVN Affordable | Levental Realty was the exclusive listing
broker for the seller. Jamie Renzenbrink
led the transaction as senior advisor on behalf of the firm.
Gene Levental, managing director, SVN Affordable | Levental
Realty, commented, “This was a very important and significant transaction
both with respect to the original developers selecting the right investor, and
for the long-term preservation of affordability in Jersey City. The transaction was complex having been
predicated on future rents in return for a thoughtful renovation funded through
private equity and GSE debt, while projecting both fixed and variable expenses
for the long run by making building improvements and leveraging operational
efficiencies from related nearby properties.
“After creating and vetting a pool of 70 qualified
developers through a 45-day marketing process, the seller selected Hudson
Valley as the right fit for the acquisition of this legacy
portfolio.”
