KANSAS CITY, MO-Pembrook Capital Management LLC recently arranged financing for an 11-building million redevelopment project in the Armour Boulevard area. Antheus Capital has spent $60.5 million in purchasing the 600 apartment, and plans to rework the pre-World War II buildings.
The units have fallen into disrepair and are mostly empty. Antheus plans to use a $32 million tax-exempt private activity bond, arranged by the New York City-based Pembrook, to bring the properties back as rentals in the gentrifying neighborhood.
The Industrial Development Authority issued the bond, which is secured by a first mortgage on the properties. The proceeds of the bond issue will be used for ongoing renovations of the portfolio. In addition, the properties are financed through state and federal historic tax credits from US Bank. Finally, the city has provided a grant and an 18-year tax abatement for the project. Antheus, which has contributed $28 million of its own equity into the project, also redevelops apartments on the South Side of Chicago.
Stuart Boesky, president and CEO of Pembrook, tells GlobeSt.com that his company started a program a few months ago to acquire tax-exempt bonds to finance apartment project purchases and redevelopments. “Multifamily, of course, is the strongest class of commercial right now,” he says. “That we can enter the market as a buyer of bonds is very compelling.”
He says the Armour area has a lot renovations already, and this project should be finished and leased up within 24 months. “This is a really great rental pool, with the buildings bordered by several universities and hospitals,” Boesky says.
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