Security Properties, in partnership with nonprofit Housing Up Development, recently acquired a 48-unit affordable housing development in the District of Columbia.
Hedin House Apartments, a five-story building constructed in 1956 and renovated in 1973, serves seniors and disabled residents earning 60% of the area median income. In addition, a Sec. 8 Housing Assistance Payment contract provides subsidies for 70% of the units. As part of the transaction, the affordability covenants have been extended for 40 years.
Extensive renovations are planned over the next 12 months to modernize all major building systems and to enhance the aesthetic appeal and functionality of the residential units and common areas. The property will undergo a $115,000 per unit renovation, including new kitchens and baths, appliances, windows, and flooring; electrical, plumbing, and HVAC improvements; and American Disability Act accessibility enhancements. In addition, a new community space and a computer room will be added.
“We anticipate a dramatic transformation at Hedin House,” says Jeff Garrison, director of affordable housing at Security Properties. “We have worked closely with the Hedin House resident community from the outset of this project, and we look forward to delivering a final product that will exceed expectations for years to come.”
The community was acquired for $3.3 million using 9% low-income housing tax credit (LIHTC) equity from R4 Capital, a low-interest loan from the District of Columbia’s Housing Production Trust Fund, and a construction-to-permanent loan from Citi Community Capital.
This is the second affordable housing acquisition by Security Properties and Housing Up Development this year in Washington, D.C. The partners acquired the 55-unit Glenn Arms, a historic multifamily property in the Adams Morgan neighborhood, for $8.8 million in February.
The two residential buildings were originally constructed in 1910 and 1916, respectively, and are undergoing a 10-month rehab. The $100,000 per unit rehab will modernize residential units and commons area, update all major building systems, provide two additional units and a new community room, and feature energy-efficiency upgrades.
Financing for the acquisition included 9% LIHTC equity, historic tax credits from the National Parks Service, a low-interest loan from the District of Columbia’s Housing Production Trust Fund, and a construction-to-permanent loan from Citi Community Capital. R4 Capital provided over $10.5 million in equity.
The two properties are part of Housing Up Development’s growing portfolio in Washington, D.C. The local nonprofit is an affordable and supportive housing developer and property manager.
Headquartered in Seattle, Security Properties is a national real estate investment, development, and operating company. The firm has acquired or developed over 81,600 residential units at a cost of over $5 billion.