LA Senior Communities Receive $19M Mortgage Financing
- Aug 17, 2017
Red Stone Tax-Exempt Funding LLC has acquired $18.8 million in tax-exempt bonds transactions via its Red Stone Direct Bond Purchase Program. The funding will provide mortgage capital for the acquisition, rehabilitation and permanent financing of a 90-unit portfolio of three affordable senior citizen rental developments in the Los Angeles metro area.
The three properties are Pacific Rim Apartments, Rancho Del Valle and Maple Park Apartments, all of which will benefit from modernization via significant rehabilitation budgets exceeding $35,000 per unit.
“All three of these properties are in attractive locations throughout Los Angeles County,” Brian Renzi, Red Stone’s managing director, told MHN. “One of the properties, Pacific Rim Apartments, in downtown Inglewood, is in a particularly interesting location given the development that is occurring nearby due to the construction of the new LA Stadium and Entertainment District.”
The rehabilitation of the properties will be done by BlueGreen Preservation and Development LLC.
“BlueGreen is grateful for the opportunity to preserve these existing affordable housing projects,” Vivian Lum, BlueGreen’s CEO, said. “We are thankful for the confidence placed in us by our lending partner, Red Stone, as well as by the nonprofit owners, and we look forward to continuing our relationship with Red Stone to further our mission of rehabilitating the existing stock of affordable housing nationwide.”
All three properties are elevator-serviced buildings and feature an on-site laundry facility, community rooms and a resident manager. Two of the properties feature an interior courtyard.
“Given the elderly and disabled tenant base, there will be significant investment in upgrading the elevators, redesigning common areas, widening the hallways and restructuring specific units to bring the properties up to current ADA standards,” Renzi said. “Renovation highlights include upgrades to all unit interiors, including the appliance package, installation and upgrading of energy-efficient mechanical systems, new roofing, HVAC upgrades, energy-efficient lighting and the improvement of outdoor community greenspace areas.”
The properties currently benefit from Section 8 rental subsidies, all of which were extended for 20 years to benefit low-income senior tenants.
“These properties are set aside for tenants who are elderly and/or disabled. This segment of the population is sorely in need of quality housing, especially in urban areas like Los Angeles,” Renzi said. “Importantly, all three of the properties are covered by long-term Section 8 HAP contracts and Land Use Restriction Agreements, which both guarantee that the properties will remain affordable for an extended period of time.”
The financing was completed in three separate bond issuances, allowing the flexibility for each transaction to close on its own timeline while minimizing transaction costs.