The plan for Portner Flats is the brainchild of Jonathan Rose Cos., a New York City-based real estate firm that focuses on affordable housing. For this deal, it partnered with Somerset Development Co. and New Community Partners, buying the former Portner Place Apartments in 2013 for $16 million from the Portner Place Tenant Association after it had exercised its right of first refusal through the Tenant Opportunity to Purchase Act.

The JV's vision was to leverage more zoning density to increase the number affordable housing units. Jonathan Rose and Somerset are doubling the number of affordable housing units by building a 96-unit affordable housing high rise. The increase in zoning density allows for the development of the market-rate apartment building and its retail component. It also is part of the complex package by which the Jonathan Rose Cos. JV will finance the project.

“The two projects are being developed simultaneously and are closely linked,” Nathan D. Taft, director of Acquisitions for Jonathan Rose Cos., told GlobeSt.com. “We needed to close on the HUD financing and Low Income Housing Tax Credits first before we could close on the sale of the parcel to Trammell Crow.”

A Complicated Package

The financing for the project consists of multiple steps and players beginning with the acquisition in 2013. Jonathan Rose Cos.' Rose Green Cities Fund provided an equity investment and Citi Community Capital provided the initial first mortgage loan through Freddie Mac. The DC Dept. of Housing and Community Development also provided an acquisition loan.

Portner Flats' development is being financed with tax exempt bonds issued by the District of Columbia's Housing Finance Agency and 4% Low Income Housing Tax Credits. Prudential Mortgage Capital Co. is underwriting FHA insured construction and permanent loans through the 221(d)4 program. Boston Financial is serving as the tax credit syndicator and Capital One as the LIHTC investor. Owner financing is providing internal subsidy to expand the affordability and the amenity package.

Other participants in the project include Clark Construction and Eric Colbert & Assoc., which designed the building.

WASHINGTON, DC--High Street Residential, a division of Trammell Crow Co., has closed on a half-acre parcel on U Street that was once home to the 48-unit Portner Place Apartments, a Section 8 housing complex in the heart of the U Street corridor, located on the 1400 block of U and V Streets, NW in Washington, DC. It paid $55 million for the parcel as part of a partnership with Deutsche Asset Management to develop the 288-unit, market rate apartment building at 1441 U Street, NW, that will also have more than 15,000 square feet of retail.

Delivery is expected in mid-2018, which sounds extremely expedient for a newly-closed parcel of land, save for the fact that pre-development has been under way for a while.

This building is part of a larger project called Portner Flats, which its developers believe could become a model for future urban projects in which affordable housing is part of the structure.

A Jonathan Rose Cos. Brainstorm

The plan for Portner Flats is the brainchild of Jonathan Rose Cos., a New York City-based real estate firm that focuses on affordable housing. For this deal, it partnered with Somerset Development Co. and New Community Partners, buying the former Portner Place Apartments in 2013 for $16 million from the Portner Place Tenant Association after it had exercised its right of first refusal through the Tenant Opportunity to Purchase Act.

The JV's vision was to leverage more zoning density to increase the number affordable housing units. Jonathan Rose and Somerset are doubling the number of affordable housing units by building a 96-unit affordable housing high rise. The increase in zoning density allows for the development of the market-rate apartment building and its retail component. It also is part of the complex package by which the Jonathan Rose Cos. JV will finance the project.

“The two projects are being developed simultaneously and are closely linked,” Nathan D. Taft, director of Acquisitions for Jonathan Rose Cos., told GlobeSt.com. “We needed to close on the HUD financing and Low Income Housing Tax Credits first before we could close on the sale of the parcel to Trammell Crow.”

A Complicated Package

The financing for the project consists of multiple steps and players beginning with the acquisition in 2013. Jonathan Rose Cos.' Rose Green Cities Fund provided an equity investment and Citi Community Capital provided the initial first mortgage loan through Freddie Mac. The DC Dept. of Housing and Community Development also provided an acquisition loan.

Portner Flats' development is being financed with tax exempt bonds issued by the District of Columbia's Housing Finance Agency and 4% Low Income Housing Tax Credits. Prudential Mortgage Capital Co. is underwriting FHA insured construction and permanent loans through the 221(d)4 program. Boston Financial is serving as the tax credit syndicator and Capital One as the LIHTC investor. Owner financing is providing internal subsidy to expand the affordability and the amenity package.

Other participants in the project include Clark Construction and Eric Colbert & Assoc., which designed the building.