Keybank Finances NJ Affordable Housing Projects

Omni New York secured a first-of-its-kind loan to acquire and rehabilitate Garden Spires and Spruce Spires apartments in Newark.

KeyBank Real Estate Capital (KBREC) and KeyBank Community Development Lending & Investment (CDLI), in a partnership with Fannie Mae, announced an inaugural loan for development firm Omni New York LLC for its acquisition and rehabilitation of Garden Spires and Spruce Spires apartments in Newark, N.J.

The Fannie Mae Healthy Housing Rewards Enhanced Resident Services loan was provided to Omni New York LLC and totaled $98.4 million. The loan was broken down into three separate loans: A $59 million Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) loan and a $23.8 million Economic, Redevelopment and Growth (ERG) bridge loan secured by Garden Spires Apartments, and a $15.6 million Fannie Mae Affordable Mortgage loan secured by Spruce Spires Apartments.

Dirk Falardeau of Key’s Commercial Mortgage Group and Kyle Kolesar of KeyBank’s CDLI group arranged the financing for both properties.

“Through our relationship with Fannie Mae, KeyBank is able to invest in affordable housing that will have a long-lasting impact on communities by improving the quality of life for residents, families and surrounding neighborhoods,” said Rob Likes, national manager of KeyBank’s CDLI team, in prepared remarks. “The rehabilitation of Garden Spires and Spruce Spires Apartments will preserve and improve the quality of 656 affordable housing units in the greater Newark community.”

KeyBank CDLI recently provided $30.9 million in construction financing for two new affordable housing communities in Seattle, as well as a $34.8 million construction loan for an affordable community in Austin, Texas.

 A FRESH START

Both properties will undergo renovations, including lobby areas, common areas, replacing and upgrading building mechanics, modernizing elevators, new roofs and doors, replacing boilers and overhauling and installing new security cameras.  In-unit capital improvements include new floors, windows, kitchen cabinets, appliances and bathroom fixtures.

In addition, resident services will be provided to both properties, including programming for health and wellness, nutrition and healthy food access, workforce development, adult and youth education support, and community engagement.

Built in 1920, Spruce Spires Apartments is a 112-unit subsidized housing property with all units included in a project-based Section 8 Housing Assistance Payment (HAP) contract. The property is also part of New Jersey’s PILOT program. The community is comprised of six five-story buildings.

Built in 1963, Garden Spires Apartments is a 544-unit high-rise, affordable housing community comprised of two 20-story apartment buildings.

 Image via the City of Newark