Hudson Valley Real Estate Group (HVPG) has entered into two refinancing agreements totaling $190 million for the preservation of three affordable multi-family communities in New York: Keith Plaza, Kelly Towers and Los Tres Unidos Apartments. The communities total 748 units, all of which will undergo renovations, while remaining affordable in the long term. None of the current tenants will be moved as part of the preservation process.
HVPG’s private equity fund, Hudson Valley Preservation Fund II, will join the partnership between HVPG and Phoenix Real Estate Group by owning the 311-unit Keith Plaza, located at 2475 Southern Blvd., and the 302-unit Kelly Towers, located at 2405 Southern Blvd. Both communities are already part of a HUD Section 236 agreement. A total of 282 units at Keith Plaza are subject to HUD’s rental assistance program, while 268 units at Kelly Towers benefit from Section 8 vouchers.
HVPG and its partner purchased the two affordable properties in 2015. The communities provide housing for low-to-moderate income families and seniors and were originally built in 1975 under the Mitchell Lama housing program. HVPFII received $104.9 million for the equity deployment, as well as additional debt funding through the New York City Housing Development Corporation.— $10.6 million for Keith Plaza and $10.7 million for Kelly Towers, according to PropertyShark data.
Existing affordability restrictions in communities will be extended for 15 years. The recapitalization will also help the owner begin the second phase of the approximately $20 million renovation plan in the communities. This phase will consist, among other things, of adding free Wi-Fi and modernizing the community spaces. A landscaped terrace with lounge seating will also be added.
An Affordable Gem in Manhattan
HVPG, with partners New El Barrio for the Rehabilitation of the Vivienda and the Economy (NERF) and NCV Capital Partners, acquired Los Tres Unidos Apartments at 1680 Madison Ave. in 2017 for $57 million, according to Yardi Matrix data. Immediately after, NERVE sought out partners to make capital improvements to the community. Now, Nuvean will enter the joint venture with an investment, with HVPFII to help with long-term preservation. Among other things, the $85.1 million recapitalization will help repair the sidewalks, replace the roof and add free Wi-Fi.
All 135 units of Los Tres Unidos Apartments benefit from Section 8 vouchers, as well as a Section XI tax abatement regulatory agreement with HPD. Originally built in 1982, the property features a mix of one- and three-bedroom floor plans. Los Tres Unidos Apartments is surrounded by several dining, retail and entertainment options, with Central Park North Subway Station less than half a mile to the west and Mount Sinai Hospital less than a mile away. one mile south.
HVPG has been active in the affordable housing market in New York. Last October, the company acquired two more affordable housing properties in Spring Valley, New York. The assets traded for a total of $25.8 million and the company intends to inject $44 million into their rehabilitation and preservation.