AFL-CIO Puts $90M into LES Multifamily Development
New York--The AFL-CIO Housing Investment Trust has invested $90 million in the Lands End II property on Manhattan's Lower East Side, which will allow rental units to remain affordable for low- and moderate-income renters.
By Dees Stribling, Contributing Editor
New York–The AFL-CIO Housing Investment Trust (HIT) has made a $90 million investment in the Lands End II property on Manhattan’s Lower East Side, a transaction that the investment fund says will allow the property’s 490 rental units, which are its two 26-story towers, to continue to be affordable for low- and moderate-income renters. HIT purchased $90 million of the total $175 million Fannie Mae multifamily mortgage-backed securities from Beech Street Capital to help refinance the property.
Lands End II was New York City’s first Section 8 family project, developed in 1979 by the Two Bridges Neighborhood Council in partnership with the Settlement Housing Fund. Many of the residents are working or retired union members.
With the purchase of these securities, the union’s investment fund has invested about $500 million in the city since launching its New York City Community Investment Initiative in early 2002. HIT created the initiative following the September 11, 2001 attacks to help New York attract capital for affordable housing and economic development.
Under the initiative and a subsequent workforce housing initiative, HIT says it has helped create or preserve more than 21,000 multifamily housing units in the city, with most of them affordable to low- or moderate-income households. According to the fund, If the private market had built these 16,000 affordable units, they would have cost an estimated $5.7 billion, instead of the roughly $400 million invested by the HIT.
All together, HIT currently manages nearly $3.9 billion in assets for about 350 investors, which include union and public employee pension plans. HIT invests primarily in government- and agency-insured and -guaranteed multifamily and single-family mortgage-backed securities; besides providing returns for its investors, HIT aims to generate employment for union members in the construction trades and related industries. Since its inception, the HIT has invested over $5.9 billion to finance more than 96,000 units of housing nationwide.