HVPG Closes Two Affordable Housing Preservation Deals Totaling $190M

NEW YORK, NY – Hudson Valley Property Group has closed two preservation transactions, totaling $190 million, across three multifamily properties in New York City.

Per the deals, the firm will preserve 748 units as long-term affordable housing and it will implement upgrades and renovations at each property.

The first transaction’s properties comprise Keith Plaza and Kelly Towers located at 2475 and 2405 Southern Blvd. in the Bronx, respectively. The second transaction consists of Los Tres Unidos Apartments located at 1680 Madison Ave. in Harlem.

HVPG will ensure that the preservation process will not displace any tenants.

“In high-cost markets like New York, it is essential to ensure housing stays affordable across a broad spectrum of incomes,” states Jason Bordainick, HVPG managing partner and co-founder. ”This ensures families can build strong, lasting communities and the city can attract and maintain the vitality and diversity that make it so special.”

The $104.9 million recapitalization of the 311-unit Keith Plaza and the 302-unit Kelly Towers allows HVPG’s real estate private equity fund, Hudson Valley Preservation Fund II, to deploy equity and additional debt financing secured through the New York City Housing Development Corp.

HVPF II will enter the new purchasing partnership with existing partners, HVPG and Phoenix Realty Group. Both Keith Plaza and Kelly Towers are subject to a HUD Section 236 agreement. 282 of the apartments at Keith Plaza are subject to a HUD rental assistance program contract, and 268 apartments at Kelly Towers benefit from tenant-based Section 8 rental assistance vouchers.

HVPG and its partners initially acquired Keith Plaza and Kelly Towers in 2015. Originally constructed in 1975 under the Mitchell Lama Housing Program, the properties offer housing for low- and moderate-income families and seniors.

With the financing, HVPG will be able to extend the properties’ existing affordability restrictions by 15 years. The recapitalization additionally enables the commencement of Phase II of the more than $20 million renovation, which will include improvements to the resident experience, such as free WiFi and indoor and outdoor community spaces.

“The recapitalization of Keith Plaza and Kelly Towers will extend affordability another 15 years, while funding important upgrades and renovations throughout both properties,” says HDC president Eric Enderlin. “This latest preservation effort reaffirms our commitment to the residents of Keith Plaza and Kelly Towers and is a victory for our city as we work to protect the affordability and quality of our Mitchell-Lama housing stock.”

“PRG, as part of its affordable housing business, is pleased to be part of the team that has both previously enhanced the properties with the Phase I improvements and plans to enhance with the Phase II improvements,” states Ron Orgel, managing director, principal and co-founder at PRG. ”The challenges of the COVID-19 pandemic have impacted all New Yorkers and together with our partners, we are excited to continue to preserve these properties, meet the needs of the residents by offering high quality, affordable housing and enhance the overall experience for the families and seniors that call Keith Plaza and Kelly Towers home.”

HVPG’s $85.1 million preservation deal for the 135-unit Los Tres Unidos Apartments provides long-term capital for additional property improvements, such as sidewalk and ground repairs, roof replacement and free WiFi.

HVPG and its partners initially acquired Los Tres in 2017 when one of its original owners, local Harlem not-for-profit organization, Nuevo El Barrio para la Rehabilitacion de la Vivienda y la Economia (NERVE), was seeking a partner to help them retain control and invest further in the community asset.

Nuveen will enter the existing partnership of HVPG, NERVE and NCV Capital Partners, to invest significant capital at Los Tres alongside HVPF II. All of Los Tres’ units are subject to a HUD section 8 contract and Article XI tax abatement regulatory agreement with the New York City Housing Preservation and Development.

“Nuveen’s business plan includes the implementation of a sustainable, social impact program for the residents of Los Tres to promote health and wellness and financial empowerment to achieve better outcomes with a focus on closing the wealth gap,” states Pamela West, managing director of Nuveen’s real estate impact investing group. “We strongly believe our long-term collective ownership can deliver a positive impact while preserving and maintaining quality housing for this community.”

“It took quick action and swift insight to complete the initial acquisition of Los Tres Unidos apartments and we jumped at the opportunity to work in the instrumental partnership of HVPG,” says Keith Gordon, managing partner of NCV Capital Partners. “NCV Capital’s goal is to preserve the identities of these rich and historic communities and safeguard residents who rely on affordable housing from rent hikes. Through this carefully crafted team of developers and partners, we are certain these goals will be reached.”

NERVE Inc. president and general manager adds, “NERVE continues to provide low-income housing and housing preservation for our community of El Barrio/East Harlem.”

Bordainick adds, “We thank our partners at the city, as well as HDC and HPD leadership, for their continued support of our preservation efforts by providing the tools to help these homes remain high-quality, affordable housing for many years to come.”