DEAL OF THE DAY: Red Stone Provides $74M Financing to Low-Income Rental Property in Brooklyn
- Apr 18, 2008
By Anuradha Kher, Online News EditorNew York–Red Stone Partners recently closed a $74 million tax-exempt financing and $35 million direct equity placement to be used for the preservation and rehabilitation of a low-income multifamily housing property in Brooklyn, New York.Linden Plaza consists of five high-rise buildings containing 1,527 apartments. Red Stone worked in conjunction with Wachovia Multifamily Capital and Freddie Mac to provide The DeMatteis Organization with a new tax-exempt debt structure specifically designed for the rehabilitation and preservation of low-income Mitchell-Lama as well as HUD Section 8 and 236 properties. Red Stone provided first loss mezzanine credit enhancement for the debt facility and also arranged for the direct placement of $35 million in tax credit equity with a single investor. NYC Housing Development Corp. issued the tax-exempt multifamily housing bonds.The DeMatteis Organization plans to spend approximately $52 million towards the renovation of the property. In addition to common area upgrades, the tenants will also receive refurbished units with new kitchens and baths. All the renovations will be completed with no tenant displacement.“This structure provides maximum loan proceeds and a single source of funds for both construction and permanent financing,” says Jim Gillespie, managing director ofRed Stone.Red Stone is now offering this financial product to owners and developers of low-income multifamily apartment properties throughout New York City.