Greystone Preserves Affordable Housing in $130M Deal

Park Place in Zephyrhills, Fla., was one of the properties that’s set for a major rehabilitation.

New York—Greystone Affordable Housing Initiatives LLC, a Greystone affiliate, has closed a $130 million deal that will preserve 1,058 affordable housing units in Florida. The residences are housed in 24 aged USDA Rural Development Section 515 properties in 12 counties across the state. The Hallmark Cos. Inc. owns and operates the properties.

Greystone’s affordable housing preservation group worked with the USDA’s Rural Housing Service (RHS) national and Florida offices, as well as with the Osceola County Housing Finance Authority (OCHFA) and Florida Housing Finance Corp., to secure the financing needed to acquire and rehabilitate the at-risk properties.

“With each new preservation project we undertake, we see unique challenges, and without the collaboration of everyone involved, we would not be successful,” said Tanya Eastwood, president of Greystone Affordable Housing Initiatives. “Our ability to orchestrate such a complex repositioning is dependent upon the close cooperation of public and private sectors, and at the end of the day, what drives everyone to the finish line is the dedication to the hundreds of residents who will ultimately benefit from the rehabilitation of their homes.”

“The preservation of aging affordable housing is an ongoing challenge we continue to face within the housing industry,” added Pete Peterson, president of The Hallmark Cos. “There is a critical need for both the affordability and long-term physical viability of these multifamily housing communities in rural areas throughout the country. These homes are a valuable resource for both the elderly and families in local communities, who would otherwise not have access to safe, dependable and sanitary housing.”

Tanya Eastwood, President, Greystone Affordable Housing Initiatives

The deal included both public and private funding, including:

• Tax-exempt bonds: A single issuance of $41.6 million in multifamily private activity tax-exempt bonds by Osceola County;
• Low-Income Housing Tax Credits: The purchase of 4 percent federal LIHTCs by Boston Financial, generating $28.1 million in capital contributions;
• RHS 515 debt: Assumption and subordination of $26.7 million of original USDA Section 515 debt. The Section 515 program is a direct loan program providing subsidized loans to developers of affordable housing in rural markets. Sixty-two percent of the 1,058 units will also receive Section 521 Rental Assistance provided by RHS;
• Senior debt: Long-term debt of $29.9 million comprising $12.5 million in USDA guaranteed 538 loans provided by Greystone Servicing Corp. Inc. and $17.3 million in newly issued Soft Second USDA loans; and
• Additional support: Other funding sources totaling $4.5 million.

The rehabilitation of the properties is planned for completion in 12 months and will not displace any residents. Renovations will average about $32,000 per unit, and include both interior and exterior upgrades. The properties were all built between 1975 and 1995, so the renovation will focus on modernizing the buildings and making them more accessible.

“OCHFA worked with Greystone and Hallmark to aggregate 24 small multifamily properties located around the state, each alone could not have been affordably rehabilitated, into a single statewide portfolio,” said Rocky Owen, OCHFA chair. “Without relocating residents from their units, our residents will see the upgrade and modernization of 1,058 affordable rental housing units located in 12 counties, including three developments in Osceola County. The OCHFA, through its issuance of tax-exempt bonds, worked with Greystone and Hallmark to provide quality affordable housing to our residents, at no cost to the taxpayers in Osceola County.”

Greystone has been active this month, just a few days ago providing a $42.5 million Fannie Male loan for the acquisition of two Phoenix properties.