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Nuveen JV buys 400-unit affordable apartment portfolio

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.

Van Wagenen Apartments

“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.

Kennedy Manor

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.” 

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