Fairstead and LIHC Investment Group have acquired a 691-unit affordable housing portfolio in Newark, N.J.
Fairstead and LIHC also received an undisclosed amount of acquisition financing from the Urban Investment Group within Goldman Sachs Asset Management and Berkadia. Dane Global represented both the buyer and the undisclosed seller in the transaction.
The Newark affordable housing portfolio includes the 450-unit senior housing community Essex Plaza One located at 1060 Broad St. and 12 other surrounding properties totaling 241 units. The portfolio is fully affordable and is supported by a rental assistance contract with the U.S. Department of Housing and Urban Development. As well as being the property owner, Fairstead will serve as the community’s lead developer, general contractor and property manager. According to sources familiar with the deal, the two companies acquired the Essex Plaza One for $85 million.
Fairstead also recently announced a $500 million equity commitment to strategically grow the company’s operations, affordable housing portfolio and enhance the programming throughout its communities. The company’s $2.3 billion pipeline includes Florida, Kentucky, New Jersey, New York, Pennsylvania and Washington, D.C.
As for its latest Newark property, Fairstead and LIHC will invest more than $27 million into Essex Plaza One through sustainable renovations and improvements, as well as on-site support services. For the senior housing units, Fairstead will renovate them by installing Energy Star appliances and upgrading apartment finishes, while also providing internet and cable access to all units. The new ownership is also planning to renovate a portion of the units to Uniform Federal Accessibility Standards for residents with mobility challenges.
Throughout the Essex Plaza One site, renovations will also include new lighting, signage, security cameras and windows as well as upgraded elevator equipment and sidewalk repairs. Fairstead will refurbish the community room and the accompanying kitchen but also build a new fitness center. As the property manager, Fairstead is also employing a full-time on-site resident services coordinator for residents to get access to health, medical, social services and curated event programming. Fairstead and LIHC are also planning to pursue future improvements at the surrounding 12 affordable housing properties within the portfolio.
The revitalization efforts will be done in partnership with the State of New Jersey, City of Newark’s Department of Economic and Housing Development, New Jersey Housing and Mortgage Finance Agency and HUD, according to Fairstead.