Hudson Valley Property Group (HVPG) and Nuveen recently acquired 412 units of family affordable housing in Jersey City, New Jersey.
The four properties—Van Wagenen I Apartments (233 units), Van Wagenen II Apartments (114 units), Bergen Manor (40 units), and Kennedy Manor (25 units)—were purchased from the same seller, a private investor.
The developments are subsidized through Department of Housing and Urban Development (HUD) project-based Section 8 contracts. No residents will be displaced as a result of this sale, and all Section 8 income-qualified residents will continue to pay 30% of their annual income in rent, according to officials.
The acquisition is the first phase of a long-term preservation plan that will include thoughtful and sustainable upgrades to the properties, including reimagining the building access to create a more opulent entry with next generation access control, lobby rejuvenation, full elevator modernization, and complete boiler upgrades, according to officials.
HVPG is a New York City-based affordable housing preservation firm that owns more than 5,500 units of low- and moderate-incoming housing across the East Coast. Approximately 3,400 units are located throughout New Jersey across 23 properties.
“The previous owners and their dedicated team took great pride in providing much-needed affordable housing for families throughout New Jersey,” said Jason Bordainick, HVPG managing partner. “We are excited to be able to build upon their legacies, and to further enhance the properties while preserving affordability for decades to come.”
SVN Affordable | Levental Realty acted as the exclusive listing broker and was responsible for valuing, marketing, and negotiating the transaction on behalf of the seller, a private investor. Jamie Renzenbrink led the transaction as senior advisor on behalf of the firm.
HVPG manages a Community Reinvestment Act-eligible private equity fund, Hudson Valley Preservation Fund, focused on the acquisition and preservation of affordable housing. Equity capital for this portfolio transaction was provided by the equity fund and Nuveen, the investment manager of TIAA with $1 trillion in assets under management.
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. This $145 million project demonstrates a substantial social impact investment to preserve New Jersey’s aging supply of affordable housing without relying on limited state public funds.
The law firms of Nelson Mullins Riley & Scarborough, Nixon Peabody, Berman Indictor, and Paul Hastings represented the joint venture in the transaction.
"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,” said Gene Levental, managing director, SVN Affordable | Levental Realty. “The transaction was complex having been predicated on future rents in return for a thoughtful renovation funded through private equity and GSE [government-sponsored enterprise] 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."
