(To read more on the multifamily market, click here.)
NEW YORK CITY-Apollo Real Estate Advisors teamed with non-profit developer Housing and Services Inc., Ramius Capital Group and Morgan Stanley Mortgage Capital Inc., to acquire Lafayette Morrison and Lafayette Boynton Housing Corps. in the Bronx for approximately $100 million. In the Soundview section of the borough, the complex features eight, 19-story apartment buildings with 1,865 residential units. The properties contain 1.4 million sf of residential space.
The partners plan to convert the properties to affordable cooperatives. According to James Simmons, partner at Apollo, conversion costs will be approximately $10 million which will include about $7 million in capital improvements for hallways, landscaping and façade work. For insiders, units will be marketed as is. For new buyers, there will be a moderate level of capital improvements, he says. The conversion will be accomplished in two phases. Apollo anticipates that half the units will be marketed by the end of 2006 and the other half by the beginning of 2008.
Simmons adds that the structure of the deal is a first as it is 100% privately financed, involving no direct public funds. "Apollo's involvement in this project is part of our ongoing strategy to focus investment on the affordable and middle-income housing market in New York, which we believe is underserved."
HSI was engaged by tenants to assist in acquiring the properties with the goal of converting them to affordable cooperatives for the existing tenant base, which consists primarily of working families with incomes between $30,000 and $60,000 per year. In financing the acquisition, Apollo partnered with Ramius, which co-invested equity, and Morgan Stanley, which provided debt.
Last week, Apollo teamed with newly formed Vantage Properties LLC to acquire a residential complex in Harlem. Sources told GlobeSt.com that the purchase price for the 1,800-unit Delano Village was approximately $175 million. Apollo is planning on investing more than $1 billion in all property types in the New York metropolitan region over the next three years.
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