Candlebrook Properties’ new division, CB3, has acquired its first affordable housing development.
The purchase signals the New York–based firm’s entry into the affordable sector after being active in market-rate and student housing.
CB3 acquired the 152-unit Berkeley Terrace Apartments in Irvington, N.J., using tax-exempt bonds bonds and low-income housing tax credits (LIHTCs), which will allow the firm to renovate the property and preserve its long-term affordability.
“Prior to joining Candlebrook, I specialized in rehabilitation projects, specifically in the use of tax incentives and government subsidies in connection with the rehabilitation and new construction of affordable and workforce housing properties,” says Josh Levy, managing director of Candlebrook Properties, “Leading Candlebrook into new territory under CB3, I’m confident we will produce affordable housing that serves the community through its amenities, attention to detail, and overall quality of life that it offers.”
Levy joined Candlebrook after holding positions at Roizman Development and Centerline Capital Group.
The firm’s new division will be a return to affordable housing for Levy and others at the firm and a way for Candlebrook to diversify, he says.
It will focus on acquisition-rehab deals, predominantly Department of Housing and Urban Development (HUD) properties in the Northeast and Mid-Atlantic. Levy says an area of attention will be on struggling properties that the firm can acquire and strengthen for the residents and the community.
CB3’s first development is about a $26 million project. Candlebrook has focused on rehabilitation projects, and it is planning extensive renovations throughout the Berkeley Terrace property, including rehabilitating apartment kitchens and bathrooms and installing new windows and doors, according to Levy. Candlebrook expects to spend a little over $6 million on renovations, or $40,000 per unit.
The New Jersey Housing Mortgage Finance Agency (NJHMFA) issued the bonds and awarded the LIHTCs to purchase the property, which serves families at or below 60% of the area median income. Financing was made possible by R4 Capital Funding, which purchased $16.3 million in tax-exempt bonds, and Alliant Capital, which provided $8.1 million in tax credit equity. HUD provided a Mark-to-Market project-based Sec. 8 contract. The city of Irvington also provided a PILOT (payment in lieu of taxes) agreement and additional support needed to finalize the acquisition.
Founded in 2005, Candlebrook is a diversified real estate company that has been active in multifamily and student housing.