KeyBank Provides $54.9 Million of Financing for Affordable Multifamily Housing in Jersey City

Rhea-AI Summary

KeyBank secures $54.9 million to refinance Grandview Terrace Apartments in Jersey City, targeting affordable housing. The loan facilitates renovations and preserves long-term affordability through HUD programs.

Insights

Financial Analyst

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.

Market Research Analyst

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.

Urban Development Expert

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 $54.9 million for Hudson Valley Property Group to refinance Grandview Terrace Apartments, a 283-unit affordable multifamily property located in Jersey City, New Jersey. Grandview Terrace will target family households with incomes between 60% and 90% of area median income ("AMI").

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 (94%) via project-based vouchers.

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 $50,000 per unit. This rehabilitation was undertaken to preserve the long-term viability of this valuable affordable housing asset and included unit upgrades to flooring, appliances, and finishes. Common area upgrades include façade repairs, elevator upgrades, new ACs, repainting and providing access control to residents.

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 $188 billion at December 31, 2023. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications, and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.

Grandview Terrace Apartments. Photo Credit: Linda Pedroso

View additional multimedia and more ESG storytelling from KeyBank on 3blmedia.com.

Contact Info:
Spokesperson: KeyBank
Website: https://www.3blmedia.com/profiles/keybank
Email: info@3blmedia.com

SOURCE: KeyBank

View the original press release on accesswire.com

FAQ

What amount did KeyBank secure for Hudson Valley Property Group?

KeyBank secured $54.9 million for Hudson Valley Property Group.

Where are the Grandview Terrace Apartments located?

Grandview Terrace Apartments are located in Jersey City, New Jersey.

What is the target income range for family households at Grandview Terrace?

Family households with incomes between 60% and 90% of area median income are targeted at Grandview Terrace.

What HUD program loan was arranged by KeyBank Commercial Mortgage Group?

KeyBank Commercial Mortgage Group arranged the HUD Section 223(f) program loan.

How many units at Grandview Terrace receive assistance via project-based vouchers?

Assistance via project-based vouchers is provided to 267 units (94%) at Grandview Terrace.

What type of loans were used to extend the affordability of Grandview Terrace?

Flexible subsidy loans, pursuant to Section 201, were used to extend the affordability of Grandview Terrace.

What renovations were undertaken at Grandview Terrace?

Renovations of approximately $50,000 per unit were undertaken at Grandview Terrace, including upgrades to flooring, appliances, and finishes.

Where is the Journal Square neighborhood located in relation to Manhattan?

The Journal Square neighborhood is located approximately five miles west of Manhattan across the Hudson River.

Who structured the financing for the transaction at KeyBank?

Leslie Meyers of KeyBank Commercial Mortgage Group's Affordable Housing Team structured the financing for the transaction.