Preservation Development Partners has acquired its second property, a 179-unit apartment complex in East Harlem that will remain affordable for another 40 years.
The total development cost of the occupied complex is $50 million, including the acquisition and planned major rehabilitation of the property.
“This company is dedicated to the preservation of affordable housing right now,” said Francine Kellman, principal at the firm. “It fits in perfectly with what we do.”
Located at 109-125 East 130th St., East River Apartments consists of five elevator-equipped buildings, featuring 53 one-bedroom, 47 two-bedroom, 59 three-bedroom, 17 four-bedroom, and two five-bedroom apartments, as well as one superintendent unit.
The transaction is important because it means that a number of violations in the buildings will be addressed and the property will remain affordable for years to come, according to Kellman.
All units will be set aside for residents earning no more than 60 percent of the area median income, and all units–except for a single, non-income-producing common area unit, will benefit from a project-based Sec. 8 contract.
Preservation Development Partners plans approximately $31,000 per unit of rehabilitation. East River Apartments will be improved with the repair and installation of new roofs, boilers, compactors, flooring, windows, and facades. Individual apartments will be upgraded with new kitchens and new bathrooms.
The purchase and rehabilitation of East River Apartments is made possible through the use of tax-exempt bonds issued by the New York City Housing Development Corp. and credit-enhanced by Freddie Mac through its low-income housing tax credit (LIHTC) mod-rehab program. Wells Fargo is providing both debt and equity financing to the project.
This is Preservation Development Partners’ second deal since forming about a year ago. The first involved the acquisition of the 75-unit Trinity Apartments in the Bronx. The firm is working on a possible third acquisition this year.
The company is a partnership formed by K&R Preservation and BFC Partners. K&R is owned by principals Kellman and Brian Raddock. BFC is owned and operated by Donald Capoccia, Joseph Ferrara, and Brandon Baron.