Properties: Six affordable communities
Buyer: Standard Communities
Property type: Mid-rise
Location: Los Angeles
Purchase price: Withheld
Like many apartment owners in this lending environment, New York City-based affordable housing firm Standard Communities is looking for better ways to finance its deals.
“At Standard, we have a strong track record of thriving in unpredictable environments, and we are constantly exploring and evaluating ways to lower our cost of capital,” Christopher Cruz, managing director of Essential Housing for Standard Communities, told Multifamily Dive.
So when the company was leading a public-private partnership to acquire six 100% affordable Section 8 communities in Los Angeles County in an off-market transaction, it lined its debt up early in the process.
“In this particular transaction, we were able to leverage our relationship with Fannie Mae and locked in a 180-day forward [rate] earlier in the year, which resulted in a cost of debt significantly below today’s borrowing rates,” Cruz said.
After arranging financing, Standard acquired these affordable properties in Los Angeles County:
- Oxford Park, a 109-unit senior community.
- Rayen Park, an 84-unit senior community.
- Sherman Arms, a 74-unit senior community.
- Villa Marisol, a 48-unit senior community.
- Columbus Terrace, a 42-unit senior community.
- Villa San Dimas, a 50-unit family community.
Overall, the six properties, which total 407 units, have a total capitalization of approximately $122 million, including planned costs of over $8 million for property-wide renovations. Five of the six communities, which were built between 1969 and 1980, are senior affordable housing.
Standard Communities partnered with nonprofit Pacific Southwest Development Corp. in the transaction. Under new HUD Housing Assistance Payments contracts, Standard will extend the six properties’ affordability by 20 years.
“We are not only ensuring that seniors and families have an affordable place to call home, but we're also nurturing the vibrant social and economic fabric of Los Angeles County,” said Jeffrey Jaeger, co-founder and principal of Standard Communities, in a release announcing the deal. “This investment brings our portfolio in LA County to over 1,700 units.”
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