Twenty-three aging affordable housing communities have been given a fresh start by Hallmark Development Services, the development arm of The Hallmark Cos.
Located across 12 Florida counties, the rural properties were bundled into one large tax-exempt bond transaction in order to rehabilitate and recapitalize 1,058 units. Trying to finance and rehabilitate each development on its own would have likely taken years and may not have been possible without this innovative approach to preservation.
Instead, Hallmark, working with consultant Greystone Affordable Development, pooled the properties into a single deal to raise the necessary funds to preserve all the communities at once. The U.S. Department of Agriculture Sec. 515 properties were between 25 and 35 years old and required significant rehabilitation.
The portfolio bond approach allows the fixed costs in the deal to be spread across multiple properties. It also allows small, individual projects that typically cannot support a bond transaction on their own to access bond financing and 4% low-income housing tax credits.
Hallmark was able to refinance 12 family developments and 11 senior housing developments. Originally, 24 properties were involved, but two were consolidated.
The $89.1 million deal ensures that the properties will remain affordable for decades to come and has allowed the properties to be rehabilitated. Kitchens and bathrooms have been upgraded, roofs replaced, and energy efficiency improved. The team also rehabbed or added community space, which has allowed Hallmark to implement new service programs.
“This work means a lot to residents,” says Billy Glisson, vice president of acquisitions and development at Hallmark. “It’s not just their apartments. It’s their homes. It’s transformative for them.”
