LOS ANGELES—Vitus Group has acquired Christ Unity Manor, a 156-unit affordable senior housing complex, for $22.5 million from non-profit Christ Unity Church. The sale transaction took 15 months, including a eight month escrow, in a process delayed by shuttered HUD offices, the result of the government sequestration last year, and a lengthy vetting process carried out by the seller's attorneys.

“What was most critical to the church was ensuring the preservation of the senior affordable housing on the property,” Jeff Gould, Colliers International VP, tells GlobeSt.com. Gould represented the seller in the transaction along with his Collier's colleagues VP David Casper, SVP Mark Tarcynski and VP Adam Ticsher.

The property had two HUD HAP contracts expiring in May 2014, and the seller wanted to be sure that any buyer would renew those contracts and continue to use the operate the building as affordable housing for seniors. “Theoretically, another brokerage firm could have tried to sell the property to a developer who would let those contracts expire and take the property up to market rate,” says Gould. “We wanted to prove out the model and sell it only to an affordable housing user.”

Although limited to affordable housing users, the brokerage firm did not want for offers. The team received offers from 27 potential buyers in total, eventually narrowing the selection to 13 qualified buyers. “We ran a very tight and competitive qualifications process,” says Gould, adding that price was not the most important characteristic of each offer. Because the church wanted to ensure that the buyer would continue use the property as intended, it vetted each buyer on the shortlist individually. “We had a pretty rigorous qualification process, which included a 60 to 90 minute buyer interview with the church board's attorneys,” Gould explains. “In those interviews, we vetted out everything from the underwriting to the intangibles, like assuming and extending the HUD HAP contracts, investing in programs for the seniors and rehabbing the property. It was a very exhaustive process for the buyers, but it was a really important to the church that this was vetted out.”

The vetting process took approximately four months. Once the buyer was selected, the process was delayed once again because of the closed HUD offices during last year's government sequestration. “The local HUD hub office shuttered because of the sequestration, and had limited staff resources to focus on imminent projects. We were dealing a lot with the Washington D.C. office when we couldn't get in contact with the local HUD office. We really adjusted resources quickly and as we needed on the fly,” Gould says. Eventually, the buyer was able to renew the HUD HAP contracts. As part of the sale transaction, it will maintain those contracts for the next 55 years.

The church pastor built the property in 1973, and it has since been owned and operated by the church as affordable senior housing. According Gould, the property was well maintained and in good condition. The church chose to sell the property to help fund other “mission critical” projects in the neighborhood.