In partnership with Camber Property Group, LIHC Investment Group has acquired Lexington Court in East Harlem, N.Y. The nine-building Section 8 portfolio was acquired for $85 million.
The acquisition and preservation will allow 229 units of deeply affordable housing to be maintained for another 40 years, or through the year 2061. It will also free up $10 million earmarked for infrastructure repairs and building system upgrades.
Among 224 affordable apartments, there is one studio, 44 one-bedroom, 117 two-bedroom, 40 three-bedroom and 22 four-bedroom units. Five additional superintendent units bring the total to 229 residences.
“One challenge inherent in completing large portfolio acquisitions such as this one is that competition for deals remains high,” Andrew Gendron, principal at LIHC Investment Group, told Multi-Housing News. “Affordable housing is a stable investment and has fared well over the last two years, drawing more institutional buyers to the space. Reputation is everything. And LIHC and Camber benefit from a long track record and history of working in tandem with our federal and local housing agencies. We look forward to improving these buildings for our residents and the community at large.”
Each of the nine properties in the Lexington Portfolio rises four to six stories in height and is primarily situated along East 118th and East 119th Streets on either side of Lexington Avenue. For the most part, the apartment buildings were constructed in 1920.
To finance the acquisition, the partnership executed a $73.1 million FHA risk-share loan with the New York City Housing Development Corporation (HDC). In addition, the partners furnished developer equity of $11.5 million. LIHC and Camber will embark on a $10 million improvement plan across the properties.
Infrastructure and systems upgrades intended to help make the properties more comfortable and livable will include substantial plumbing and electric upgrades, a new security and intercom system, masonry and façade repair and common area improvements. Regulatory agreements accepted by the new owners ensure current and future residents will contribute no more than 30 percent of their monthly adjusted incomes toward rent.
Two months ago, LIHC Investment Group and Fairstead acquired a 691-unit New Jersey affordable housing portfolio.