University Village, a large affordable housing development in DeKalb, Ill., will undergo a major rehabilitation after being recapitalized by Security Properties.
The development is a key source of affordable housing in the area with 534 units of both townhouses and apartments. University Village provides a mix of project-based Sec. 8 housing as well as income-restricted units at 60% of the area median income.
The community was developed in the 1970s and 1980s utilizing various financing incentives offered by the Department of Housing and Urban Development (HUD) and the Illinois Housing Development Authority (IHDA). Two of the three phases also participated in the Low Income Housing Preservation and Resident Homeownership Act program.
Last June, Security Properties received an allocation of 4% low-income housing tax credits, which is facilitating the current recapitalization. The housing credits are being paired with an issuance of tax-exempt bonds by IHDA and Sec. 223(f) HUD-insured permanent financing sourced by Pillar Finance, a division of SunTrust Bank, with PNC Real Estate partnering with Security Properties as the LIHTC investor. Stifel served as the bond underwriter and investment banker.
"The revitalization of University Village is a complex undertaking that combines the restructuring of numerous regulatory agreements, layering of multiple sources of financing, and renovation of an entire apartment community for current and future residents. The Security Properties team was unrelenting in pursuing everything needed to get this deal done," said Peter Nichol, managing director within the Pillar division of SunTrust Bank, which provided the FHA-insured loan for the project.
Officials declined to disclose the total amount of the deal but said the rehab work, which will occur over the next 12 months, will be significant.
The team will upgrade the unit kitchens and bathrooms and provide significant exterior and site improvements, including key accessibility modifications. The community center will also be expanded to include a resident resource and activity area.
"The preservation of University Village is the centerpiece of this transaction,” said Bryon Gongaware, managing director of affordable housing at Security Properties. "Being able to substantially rehabilitate the property while preserving critical affordable housing for the long-term is a win for everyone involved. We are excited for the transformation at the property, which will be to the benefit of the residents and the community as a whole."
Evergreen Real Estate Services, which assumed on-site property management last year, will be instrumental in orchestrating operational efficiencies while effectively communicating with residents and the community.
Headquartered in Seattle, Security Properties is a national real estate investment, development, and operating company. The firm has acquired or developed over 80,000 residential units at a cost of over $4 billion.