Silverwood Cos. of Reston, Va., has led a group of local investors in buying The Fields of Westover, a 305-unit affordable housing community in Falls Church, Va. The deal is Silverwood’s first affordable rental property purchase since 2005.
President Mark Silverwood noted that the recession has made it possible for his company to expand its affordable housing portfolio. “We stopped buying property in 2005 because the local markets had become overpriced,” he said. “Unimproved 60-year-old apartments in Arlington were selling for $140,000 to $200,000 per unit, as compared to about $44,000 per unit in the late 1990s. Even with [low-income housing] tax credit (LIHTC) equity and additional density, projects this costly could not generate sufficient income from low-income tenants’ rents to be viable. Now, however, for the first time in four years, we have finally seen a deal that we can finance, purchase, improve, and continue to operate as much-needed affordable housing.”
The property was built in 1952 and then renovated and converted to affordable housing in 1996 by the seller, Willston Commons, LLC, a partnership of a local multifamily real estate developer and a national LIHTC investor. The seller was represented by Marcus and Millichap’s Tax Credit Group.
The acquisition and redevelopment costs total about $35 million.
The buyers are not using new LIHTCs for the acquisition and rehab. Instead, they are using $27 million in new tax-exempt bond financing from the Virginia Housing Development Authority and their own cash, according to Silverwood.
Silverwood said he plans to renovate the development, which will be renamed East Falls Apartments, and maintain it as an affordable project. Improvements will include new water heaters, heating and air-conditioning units, and kitchen counters and flooring.
Silverwood hopes to buy more properties in 2010.