Developer Lands $9M LIHTC Equity for California Property
Hunt Capital Partners provided funding for the acquisition and rehabilitation of a 163-unit affordable community in Palm Desert.
Hovely Gardens. Image courtesy of Hunt Capital Partners
Hunt Capital Partners and developer D.L. Horn and Associates have secured more than $8.5 million in federal Low Income Housing Tax Credit equity financing. The funds obtained through Hunt Capital Partners Tax Credit Fund 41 will be used to acquire and rehabilitate Hovley Gardens, a 163-unit affordable community in Palm Desert, Calif.
Additional financing included an $11.2 million construction loan from Bank of the West, a $5.5 million permanent loan from California Community Reinvestment Corp., and a $5.2 million subordinate acquisition-to-permanent loan from the City of Palm Desert.
The rehabilitation of the fully affordable property will involve updating the community spaces and common areas, as well as converting 12 units into fully accessible housing. The renovations have an environmentally friendly focus too, with the use of energy-efficient options and drought-tolerant landscaping.
Situated on 12.4 acres at 74501 Avenue 42, Hovley Gardens comprises 16 two-story buildings. The 2003-built property has two-, three- and four-bedroom units with floorplans ranging between 900 and 1,300 square feet. The community is rent-restricted for residents earning from 30 up to 60 percent of the area’s median income.
California State Route 111 offers easy access to downtown Palms Springs, which is situated approximately 15 miles northwest of the community. The property is surrounded by several recreational options such as Desert Springs Golf Club, Golf Center at Palm Desert, and Desert Horizons Country Club.
According to Dana Mayo, Executive Managing Director of Hunt Capital Partners, the units are in high demand, due in part to the lack of affordable housing in the area. Demand for apartment units remains robust on a national level as well, but the multifamily sector is still facing challenges, according to the National Multifamily Housing Council’s latest report on rent collections.
The regional economy overall will likely be sustained by the Los Angeles and San Diego markets, which have fared relatively well during the challenges of the past year. San Diego office space, for instance, recorded a 3.4% year-over-year growth in rents at the close of the first quarter, while Los Angeles office rents were 6.5% higher compared to April 2020, according to the national office report released last month by CommercialEdge.
