Grove House and Park Terrace Apartments in East Orange, New Jersey sold for $7.25 million. Essex County Improvement Authority Issues $8,855,000 Project Revenue Bonds to finance acquisition, renovation, and equipping of the properties.
PTGH-EO Urban Renewal LLC purchased the two apartment buildings in East Orange last month. The 4-story buildings were originally constructed in 1925 and were renovated in 1975.
Park Terrace is located at 321 Park Avenue and contains a total of approximately 35,033 square feet of net rentable area in 39 units divided as 6 one bedroom units, 17 two bedroom units, 14 three bedroom units, and 2 four bedroom units. 38 units are Section 8 Units with the tenant-paid portion of unit rent limited to 30% of the tenant’s adjusted gross income.
Grove House is located at 254 North Grove Street and contains a total of approximately 22,747 square feet of net rentable area in 33 units divided as 16 one bedroom units, 11 two bedroom units, 6 three bedroom units. 32 units are Section 8 Units with the tenant-paid portion of unit rent limited to 30% of the tenant’s adjusted gross income.
THE PURCHASER & TEAM PTGH-EO Urban Renewal LLC, a Delaware limited liability company, is a newly created single asset entity, of which Linked Economic Development & Affordable Housing Foundation Inc. (“LEDAHF”), a Virginia 501(c)3 designated non-profit organization, is the sole member.
LEDAHF’s mission is to: 1.Promote the availability of affordable housing and to sponsor, acquire, develop, own,manage, and operate affordable rental housing for families, seniors, and disabled individuals;2.Promote local economic development; and3.To otherwise relieve the burdens of government. LEDAHF has helped local governmentfinance and construct new county buildings, public schools, parks, senior centers, animalshelters, and other needed community facilities. LEDAHF can frequently deliver these facilitiesmore efficiently, more quickly, and at lower cost.
LEDAHF has entered into an Asset Management Agreement with Alliance Fund Management LLC [“AFM”] for the acquisition, financing, and Owner’s representation. Alliance Fund Management is an Intermediary for socially responsible funding and is focused on the long-term preservation of affordable multifamily housing for qualified municipalities, housing authorities, for profit organizations and §501(c)(3) organizations whose mission is owning and operating affordable multifamily housing. The AFM Impact Bond Program™ “IBP” is a funding platform designed to help assure that the nation’s existing affordable multifamily rental housing stock is maintained. Preservation of existing housing provides communities with continuity of affordable rental housing and in-place residents with the assurance that their home will not be converted to a condo or market rent unit.
The project will be managed by Reifer Management Corporation. Reifer Management Corp. was formed in 1983 and currently manages over 350 rent-regulated units in the New York City area including New Jersey.
BOND FINANCING The acquisition and improvements to the property were financed utilizing rated tax-exempt multifamily housing revenue bonds. The Essex County Improvement Authority acted as issuer on the bonds. Standard & Poor's Ratings Services assigned an “BBB+“ rating to the senior bonds totaling $8,075,000. Subordinate bonds in the amount of $780,000 received a “BB+” rating. The total amount of Multifamily Housing Revenue Bonds Issued by the Authority was $8,855,000.
The Bonds were purchased by the underwriters, Raymond James & Associates, Inc. and CFG Capital Markets, LLC.
Per LEDAHF’s mission and certain conditions in the financing, the owner will be obligated to lease at least 75% of the dwelling units in the property to Low and Moderate Income tenants.