TODAY’S DEALS: HFF Closes $40M Sale in Chicago

HFF closes a $40 million affordable housing sale in Chicago; Red Stone Partners finalizes financing for a 760-unit community in Georgia; and Boston Capital invests in two affordable developments by USA Properties Fund.

Parkway Gardens

Chicago—Holliday Fenoglio Fowler LP has closed the sale of Parkway Gardens, a 694-unit Section 8 community on the south side of Chicago. HFF represented the seller, who remains undisclosed. The buyer was a joint venture partnership between the Related Companies and Wells Fargo & Company. Related Companies will manage the property and has plans to invest additional $40 million in capital improvements.

“The acquisition and renovation of Parkway Gardens was accomplished primarily through the use of Low Income Housing Tax Credits,” says Doug Childers, associate director at HFF. “Both sides of the transaction worked diligently and cooperatively in order to facilitate this unique and highly complex structure in order to preserve a large number of affordable housing units while achieving a substantial renovation of Parkway Gardens.”

The Illinois Housing Development Authority issued tax-exempt bonds under the New Issue Bond Program to facilitate the acquisition and renovation. Fannie Mae provided the credit enhancement for the bonds via Oak Grove Capital. Wells Fargo & Company provided additional equity through the purchase of Low Income Housing and Historic Tax Credits.

Parkway Gardens is situated on 13 acres at 6330-6546 Martin Luther King Drive near Chicago’s Hyde Park neighborhood. The community is comprised of 35 buildings with two- and three-bedroom units that average 905 square feet each.

Red Stone finalizes $28M financing for community in Georgia

Sandy Spring, Ga.—Red Stone Partners has provided acquisition financing for a community in Georgia through the direct purchase of $28 million’s worth of 80/20 tax-exempt bonds. The bonds were purchased through a floating rate financing facility priced at a spread over the weekly tax-exempt SIFMA index. The variable rate loan has a 6 year term with a 35 year amortization schedule.

The proceeds from the loan were used to acquire and renovate an apartment community located in Sandy Springs, Ga. The asset has 760 multifamily rental units and was built in 1986. The property is located on 125 acres and has community amenities including two pools, a fitness center, tennis courts, a movie theater, billiards room and a large centrally located lake.

“Red Stone provided the borrower with a single source of non-recourse financing to fund the acquisition and renovation of the property at an attractive spread over the variable rate index with flexible prepayment terms,” says Cody Langeness, managing director of Red Stone Partners.

Boston Capital invests in 2 affordable development by USA Properties Fund

Murrieta, Calif.–Boston Capital invested in the rehabilitation of Amanda Park Senior Apartments, a 397-unit multifamily apartment development located in Murrieta, Calif., and the construction of Vintage Chateau II, a 68-unit multifamily apartment development located in Petaluma, Calif.

The general partner is California-based USA Properties Fund Inc., a privately owned real estate development organization specializing in the development, construction and management of senior and family communities. To date, Boston Capital has invested in nearly 11,000 units of affordable housing in California.

The 25-building Amanda Park Senior Apartments is located on 19 acres and features 200 one-bedroom and 197 two-bedroom units. The rehabilitation will also include the expansion of a 6,652-square-foot clubhouse containing a leasing office, community room, fitness center, beauty salon, billiards room, community kitchen and an adjoining pool and spa area.

The rehabilitation of Amanda Park Senior Apartments will focus on reducing utility consumption by installing solar thermal and photovoltaic systems, advanced landscape irrigation systems and other green measures. Additional efforts will include updating the individual units, building exterior painting and clubhouse upgrades.

“Boston Capital strives to build sustainable, environment-friendly, multifamily apartment communities in California and throughout the US.” says Jeff Goldstein, COO and director of Real Estate at Boston Capital. “In additional to investing in high-quality affordable housing, we are committed to improving energy and water efficiency, reducing costs and lessening our environmental impact.”

Amanda Park Senior Apartments will be available to seniors ages 55 and older. Following the completion of the rehabilitation, the property will have 336 tax credit units at 50 percent and 60 percent of the AMI, 30 units at 80 percent of the AMI and 27 market rate apartments.

Amanda Park Senior Apartments will be rehabilitated with tax credit equity from the Low Income Housing Tax Credit (LIHTC) program and will result in the creation of approximately 42 construction and 18 long-term local jobs in the Murrieta area.

Vintage Chateau II, in Petaluma, Calif., will include 54 one-bedroom and 14 two-bedroom units located in one-three story building. Units will feature central air, garbage disposals, dishwashers, and patio/balcony with storage. Development amenities include a 2,458 square foot clubhouse featuring a lobby, leasing offices, kitchen, covered patio with a jacuzzi, fitness center and a computer lab. Residents will also have access to the pool at Phase I of Vintage Chateau.

Units will be available to seniors ages 55 or older earning 60 percent or less of the Area Median Income (AMI). The development is being constructed utilizing “Build It Green” building standards to promote integrated communities, energy and water conservation, resource conservation and healthier indoor environments.

“The property appeal, amenity package and convenient location of Vintage Chateau II will contribute to its competitive position in its marketplace,” says Goldstein. “The construction of Vintage Chateau and the rehabilitation of Amanda Park Senior Apartments are indicative of the outstanding environment-friendly products Boston Capital and USA Properties Fund continue to bring to the multifamily housing marketplace.”

Vintage Chateau II will be built with tax credit equity from the Low Income Housing Tax Credit (LIHTC) program and will result in the creation of approximately 96 jobs in the Petaluma area.

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