NEW YORK CITY-Centerline Capital Group reports it has refinanced two Harlem multifamily properties in transactions involving total funding of nearly $92 million.
Officials with Centerline Capital Group, a subsidiary of Centerline Holding Company, say the refinancing deals involve 412 units of affordable housing in Harlem at AK Houses Apartments at 112-126 East 128th St. and 1775 Houses Apartments at 107-129 East 126th St.
The borrower, Tahl Propp Equities, will undertake $4 million in renovations and upgrades to the properties and preserve their affordability as low-income housing for an additional 30 years. Centerline arranged for a total of $91.9 million in fixed rate financing through Freddie Mac. The term of the two Freddie Mac facilities is 10 years with a 30-year amortization schedule. The majority of the proceeds were used to refinance existing mortgage debt carrying above-market interest rates; a portion of the proceeds will be reinvested to address capital needs at the properties, and remaining proceeds are a return of capital to the borrower enabling Tahl Propp to reinvest in additional properties in the Harlem/Northern Manhattan market, Centerline officials report.
The borrowing entity was led by Joseph A. Tahl and Rodney M. Propp. As part of this transaction, both properties entered into 20-year project based Section 8 Housing Assistance Payment contracts with HUD. In addition, Tahl Propp entered into 30-year regulatory agreements with the New York City Department of Housing Preservation and Development for buildings, receiving partial 30-year real estate tax abatements under Article 11 and agreeing to utilize both buildings for affordable housing during the term of the agreements.
“These properties are very well-located and have averaged 98% plus occupancy over the last 12 months. The Manhattan multifamily market continues to be one of the strongest markets in the nation with significant upward pressure on rents, making Tahl Propp's 30-year commitment to low-income affordability critically important,” states Jim Gillespie, managing director at Centerline Capital Group.
Phil Melton, senior managing director for Centerline, adds that the closing of both transactions, from start to finish, was completed in 44 days.
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