CDT, Proto Partner on Coney Island Apts.

NEW YORK CITY-In its first acquisition here, affordable housing REIT Community Development Trust has partnered with Proto Property Services to purchase and rehabilitate the 360-unit Ocean Towers apartment complex in Brooklyn's Coney Island neighborhood. The 19-story multifamily property was built in 1973 as part of the state's Mitchell-Lama program.

The partners secured a $35-million acquisition loan originated by Enterprise Community Loan Fund Inc. through the New York City Acquisition Fund. They're also putting in $10 million of equity toward buying and rehabilitating the property, located in an area that was hit particularly hard by Superstorm Sandy seven months ago. Long-term financing will be provided by the Community Preservation Corp., which has issued a commitment for a $35-million, 30-year mortgage insured by the State of New York Mortgage Agency and funded by the New York City Employees Retirement System.

The project is expected to receive an additional $4.5 million of funding from the NYC Department of Housing Preservation and Development through its Article 8A Loan Program, which provides rehabilitation loans to prolong the useful life of multiple dwellings in New York City. CDT did not divulge the name of the seller. According to published reports, Cammeby's International paid $5.9 million for Ocean Towers in February 2007.

“The fact that Hurricane Sandy impacted so many areas of New York where affordable housing was already scarce makes this acquisition all the more important,” Joseph Reilly, CDT's president and CEO, says in a release. “Our rehabilitation of Ocean Towers will make the building more energy-efficient and provide for resiliency against future storms. But more importantly, we are also ensuring that Ocean Towers remains affordable for the families who already call the property home.”

Although new to the market here, CDT owns nearly 5,000 units of affordable housing across the US. Proto has completed the rehabilitation of more than 1,200 occupied units in New York City, including two large-scale properties in Brooklyn, and will serve as the managing member, general contractor and property manager for Ocean Towers.