Providence-Area Affordable Community Trades for $57 Million
The new owner plans to add 30 affordable units to the community.
The BLVD Group has acquired Rock Ridge Apartments, a 152‑unit affordable housing community in Woonsocket, RI, for $57 million. According to Yardi Matrix, the seller Conquest Housing was the seller and previous owner.
Following the acquisition, the new owner plans to conduct a number of improvements at the property. These include using Low-Income-Housing Tax Credits to preserve and upgrade its existing affordable housing stock, in addition to creating new 30 affordable units. The newly-affordable units will be available to families earning up to 50 percent or 60 percent of the Area Median Income.
Additional financing will come via tax-exempt bonds issued by Rhode Island Housing, alongside a permanent Fannie Mae loan and equity coming from the sale of renewable energy tax credits. Yardi Matrix shows that Merchants Bank is extending an existing $23.8 million construction loan.
Alongside the affordable preservation, Most of the building envelope will be renovated, and units will be fitted with modernized kitchens and bathrooms. Upgraded building systems will incorporate high‑efficiency electrical and water solutions, and most of the building’s power will come from a 666-kW solar energy generation system.
Rock Ridge’s amenity spaces will see some upgrades, as well; the property’s basketball court, clubhouse, and BBQ areas will all be renovated.
Efforts in affordable preservation
With affordable development becoming increasingly difficult, many owners and developers are looking to fill financing gaps for new projects, as well as preserve existing units.
In December of last year, Hunt Capital Partners created Tax Credit Fund 51as a new equity package to develop 1,291 affordable units across 16 communities nationwide. HCP will partner with non-profit and for-profit developers to start new construction, acquisitions, and renovations in its largest multi-investor fund to date.
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That same month, Red Stone Equity Partners closed its largest LIHTC equity investment fund to date, raising $263.2 million for Fund 113. Its primary intent is to construct and rehabilitate 1,672 affordable housing units in 19 different communities.
Governments are joining in on the effort, too. Cities like Philadelphia are creating funds to support the acquisition and renovation of properties for affordable housing, according to Doug Ressler, business manager at Yardi Matrix. “The Land Bank Acquisition Fund, for instance, helps acquire repossessed properties at public auctions to increase the supply of affordable units,” Ressler said. “These efforts are crucial in addressing the affordable housing crisis by leveraging LIHTC and other funding mechanisms to create and preserve affordable housing options.”
Doug Childers, senior managing director & capital markets affordable housing group leader at JLL’s affordable housing group told Multi- Housing News that “by leveraging tax-exempt bond financing and LIHTC equity in their acquisition strategy, investors can offset a portion of their purchase and renovation expenses.” In selling LIHTC equity to corporate investors, affordable developers and owners “generate valuable proceeds that often enable the preservation of affordable housing units while simultaneously tackling long-standing maintenance issues and updating various building systems to modern standards.”
