Hudson Valley Property Group (HVPG) has closed on the acquisition of Lincoln Park Towers in Newark, New Jersey, the final investment for the firm’s first private equity real estate fund, announced the company.
The $60 million of capital commitments raised, paired with $120 million of co-investment equity, has been leveraged to invest over $1 billion in projects, scaling HVPG’s model of preserving the financial and physical stability of affordable housing.
Hudson Valley Preservation Fund was oversubscribed in March 2019, with commitments from institutional investors, banks, family offices, and individuals. It has made 13 investments in over 25 properties, preserving more than 4,000 units of affordable housing for nearly 15,000 residents in Maryland, New Jersey, New York, and Pennsylvania, said the company.
“HVPG has developed a consistent process for revitalizing existing housing to preserve affordability, improve quality, and increase efficiencies,” said Jason Bordainick, CEO and co-founder. “Leveraging private equity allows us to significantly expand our reach, earning a reliable return for investors while serving more residents and communities.”
Illustrative of the properties across the portfolio and HVPG’s mission, Lincoln Park Towers is a 17-story building consisting of 80 units of affordable, senior housing. In addition to preserving the long-term affordability of the property, the redevelopment will include immediate renovations to individual apartment units; energy-efficiency updates; safety upgrades; and new community amenities such as a fitness room, a lending library, and a media center. Capital improvements include a new roof and repairs to windows, the façade, and elevators. The building will also be set up with Wi-Fi and high-speed internet provided at no cost to residents.
The approximately $15.2 million project is supported by the city of Newark through a new 30-year payment-in-lieu of taxes agreement, and affordability is secured by a new 20-year project-based Housing Assistance Payment (HAP contract issued by the Department of Housing and Urban Development.
All the units are affordable at the project-based Section 8 building, with the HAP contract requiring 40% of the project to be leased to residents making no more than 30% of the area median income (AMI) and the remaining Section 8 units leased to those making no more than 50% of the AMI.