KeyBank Provides $54.9 Million of Financing for Affordable Multifamily Housing in Jersey City
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The refinancing of Grandview Terrace Apartments by Hudson Valley Property Group through KeyBank is a strategic financial move that could have implications on the company's balance sheet and cash flow management. The $54.9 million HUD Section 223(f) program loan with a 35-year term provides a stable, long-term debt structure that could potentially lower the interest cost and improve the debt maturity profile. This financial restructuring could enhance the property group's creditworthiness and attractiveness to investors by demonstrating prudent financial management and commitment to long-term affordability in the housing market.
Moreover, the project-based vouchers for 267 units indicate a partnership with the public sector, which can reduce the risk of income fluctuation for the property and ensure a steady revenue stream. This kind of arrangement is typically viewed positively by the market as it adds a layer of security to the investment. Investors and stakeholders might also appreciate the focus on affordable housing, given the increasing demand and social impact, potentially leading to reputational gains and alignment with ESG (Environmental, Social and Governance) investment criteria.
From a market perspective, the investment in Grandview Terrace Apartments is indicative of a broader trend in urban redevelopment and the growing importance of affordable housing in high-demand areas. Jersey City's proximity to Manhattan and recent developments suggest a revitalization of the area, which could increase property values and attract further investment. The commitment to maintaining affordability targets family households with moderate incomes, which is a segment that often experiences housing shortages, especially in urban centers close to major employment hubs.
The enhancements and renovations to the property, averaging $50,000 per unit, suggest that Hudson Valley Property Group is positioning Grandview Terrace as a high-quality affordable housing option. This could potentially create a competitive edge in a market where affordable units are scarce. The improvements to common areas and individual units could also lead to higher tenant satisfaction and retention, reducing turnover costs and vacancy rates, which are critical factors in the profitability of multifamily properties.
The refinance and renovation of Grandview Terrace Apartments represent a significant commitment to preserving affordable housing within a key urban area. The use of HUD Section 223(f) and Section 201 programs to extend affordability and prevent tenant displacement is a noteworthy example of using federal programs to maintain community stability. These actions can have a substantial impact on local economies by ensuring that moderate-income families remain within the community, contributing to the local economy and supporting the workforce.
Additionally, the property's location in Journal Square, with access to public transportation and proximity to Manhattan, enhances its desirability and potential for long-term appreciation. The strategic location could also benefit from the spillover effects of economic growth in the region, which is often a catalyst for further development and increased property demand. This could lead to a positive cycle of investment and growth, benefiting both the property owners and the community at large.
CLEVELAND, OH / ACCESSWIRE / April 9, 2024 / KeyBank secured
KeyBank Commercial Mortgage Group's Affordable Housing Team arranged the HUD Section 223(f) program loan, structured with a 35-year fully amortizing term. The subsidy granted by the Jersey City Housing Authority provides assistance to 267 units (
Grandview Terrace was formerly designated as a HUD Section 202 development, which helps expand the supply of affordable housing with supportive services for the elderly. The property was also subject to flexible subsidy loans, pursuant to Section 201. Hudson Valley Property Group has extended the term of the Section 201(p) flexible use agreement to preserve and extend Grandview Terrace's affordability for decades to come and avoid tenant displacement.
The HUD 223(f) loan was used to refinance a KeyBank Community Development Lending and Investment (CDLI) acquisition/construction loan, which facilitated renovations of approximately
Grandview Terrace Apartments are located in the Journal Square neighborhood, approximately five miles west of Manhattan across the Hudson River. The property is readily accessible by public transportation. The PATH rail system provides service to midtown and downtown Manhattan. The New Jersey Transit bus line contains multiple stops near Grandview Terrace along John F. Kennedy Blvd. Newark Liberty International Airport is located approximately 9 miles away. Recent development of large-scale residential and mixed-use properties have been key to the revitalization of the city's central business district.
Leslie Meyers of KeyBank Commercial Mortgage Group's Affordable Housing Team structured the financing for the transaction to pay off the acquisition/construction loan financed by Eric Steinberg of KeyBank CDLI.
About KeyBank Community Development Lending and Investment
KeyBank Community Development Lending and Investment (CDLI) finances projects that stabilize and revitalize communities across all 50 states. As one of the top affordable housing capital providers in the country, KeyBank's platform brings together construction, acquisition, bridge-to-re-syndication, and preservation loans, as well as lines of credit, Agency and HUD permanent mortgage executions, and equity investments for low-income housing projects, especially Low-Income Housing Tax Credit (LIHTC) financing. KeyBank has earned 10 consecutive "Outstanding" ratings on the Community Reinvestment Act exam, from the Office of the Comptroller of the Currency, making it the first U.S. national bank among the 25 largest to do so since the Act's passage in 1977.
About KeyCorp
KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately
Grandview Terrace Apartments. Photo Credit: Linda Pedroso
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SOURCE: KeyBank
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