Hudson Valley Property Group (HVPG) has secured two refinancing deals totaling $190 million for the preservation of three affordable multifamily communities in New York City: Keith Plaza, Kelly Towers and Los Tres Unidos Apartments. The communities total 748 units which will all undergo renovations, while maintaining affordability in the long term. None of the current tenants will be displaced in the preservation process.
HVPG’s private equity fund, Hudson Valley Preservation Fund II, will join the partnership between HVPG and Phoenix Realty Group in owning the 311-unit Keith Plaza, located at 2475 Southern Blvd., and the 302-unit Kelly Towers, located at 2405 Southern Blvd. The two communities are already part of a HUD Section 236 agreement. A total of 282 units at Keith Plaza are subject to HUD’s Rental Assistance Program, while 268 units at Kelly Towers benefit from Section 8 vouchers.
HVPG and its partner purchased the two affordable properties in 2015. The communities provide housing for families and seniors who have a low- or moderate-income level and were originally built in 1975 under the Mitchell Lama Housing Program. HVPFII received $104.9 million for equity deployment, as well as additional debt financing through the New York City Housing Development Corp.—$10.6 million for Keith Plaza and $10.7 million for Kelly Towers, according to PropertyShark data.
The existing affordability restrictions at the communities will be extended by 15 years. The recapitalization will also help the owner commence the second phase of the approximately $20 million renovation plan at the communities. This phase will consist, among other things, in adding free Wi-Fi and upgrading the community spaces. A landscaped terrace with lounge seating will also be added.
An affordable gem in Manhattan
HVPG, along with partners Nuevo El Barrio para la Rehabilitacion de la Vivienda y la Economia (NERVE) and NCV Capital Partners, acquired Los Tres Unidos Apartments at 1680 Madison Ave. in 2017 for $57 million, according to Yardi Matrix data. Immediately after, NERVE sought partners to bring capital improvements to the community. Now, Nuveen will enter the joint venture with an investment, along with HVPFII to aid long-term preservation. Among others, the $85.1 million recapitalization will help repair sidewalks, replace the roof and add free Wi-Fi.
All 135 units at Los Tres Unidos Apartments benefit from Section 8 vouchers, as well as from an Article XI tax abatement regulatory agreement with HPD. Originally built in 1982, the property comprises a mix of one- to three-bedroom floorplans. Los Tres Unidos Apartments is surrounded by several dining, retail and entertainment options, with the Central Park North metro station less than half a mile to the west and Mount Sinai Hospital less than a mile to the south.
HVPG has been active in the New York affordable housing market. Last October, the company acquired two other affordable housing properties in Spring Valley, New York. The assets traded for a combined $25.8 million and the company intends to inject $44 million into their rehabilitation and preservation.