PALM BEACH, FL—An affiliate of New York-based Related Companies is zeroing in on affordable housing in West Palm Beach, FL. Woodlake Preservation, a Florida limited partnership formed in 2012 to acquire and own the fee interest and renovate Woodlake Apartments, has received a $15.2 million Fannie Mae Loan through Centerline Capital Group to achieve oen of its affordable housing goals.

Located at1749 North Jog Road in West Palm Beach and constructed in 1998, Woodlake Apartments is a 224-unit affordable multifamily complex. The apartment community offers 14 two-story buildings, a one-story maintenance and laundry facility, and a sing-story leasing office and clubhouse.

“While the property is in overall good condition, it is in need of upgrades to the building exteriors, unit interiors and the community building to preserve and maintain the property for future affordable tenants,” says Jim Gillespie, managing director at Centerline. “Centerline Capital Group was able to obtain a $15.2 million fixed-rate Fannie Mae Moderate Rehabilitation loan to use in conjunction with equity from the sale of 4% LIHTCs.”

As Gillespie notes, Related affiliate was awarded tax-exempt bonds and 4% LIHTCs from the Housing Finance Authority (HFA) of Palm Beach County. The company also tapped subordinate financing from a $2.35 million SAIL loan from Florida Housing Finance Corporation (FHFC).  

The HFA of Palm Beach County issued tax-exempt bonds worth  $13.5 million
to meet the 50% test. Those bonds will remain outstanding through completion of the rehabilitation and the placed in service date and be redeemed afterwards. PNC Bank provided $8.495 million through the purchase of low-income housing tax credits.

“Because the project will remain occupied throughout the rehabilitation, Centerline structured immediate funding through the Fannie Mae Moderate Rehabilitation program,” says Gillespie.  “The financing structure provided several advantages, including the ability to lock the rate on an immediate taxable basis to take advantage of current low interest rates versus a forward rate lock, the removal of conversion risk, and no letter of credit required during the construction period.”

The loan term is 16 years, with a 35-year amortization after 12 months of interest only payments. The financing will fund property renovations of more than $30,000 per unit.

“The short-term bond structure is a very good alternative to finance the preservation of affordable acquisition/rehabilitation transactions,” says Mark Carbone of Related. “We are seeing a tremendous increase in demand for this product and look forward to partnering again with Jim and his team at Centerline on similar transactions.”

TRG Management Company, a local management company with a large portfolio in the market and approximately 29 years of management experience in Florida, manages Woodlake. TRG currently manages over 40 properties of which 24 properties with 3,722 units are located in South Florida.