NYCERS Invests $60M in Affordable Housing Venture
The intent is to preserve 35,000 rent-stabilized units affected by Signature Bank’s collapse.
New York City Employees’ Retirement System, or NYCERS, is investing $60 million in a partnership led by the Community Preservation Corp. that will preserve nearly 35,000 rent-stabilized units affected by the Signature Bank’s sudden collapse last year, according to an announcement by New York City Comptroller Brad Lander.
The investment was made in Community Stabilization Partners, a joint venture led by affordable housing providers Community Preservation Corp. and Related Fund Management. NYCERS will own a 25% stake in the partnership.
“The 35,000 rental units in the Signature portfolio could have faced grave risks as a result of the bank’s collapse – preserving them is an enormous team effort, and we are proud to be part of it,” Lander said. He estimated the internal rate of return of the investment to be almost 11% net of fees.
After Signature Bank was put into receivership last March, Federal Deposit Insurance Corp. established ventures to sell off stakes in the $33 billion of commercial-property loans held by Signature. That included the sale of a 5% equity interest in two ventures backing the rent-stabilized and rent-controlled loans to the CPC-led partnership.
Rafael Cestero, chief executive officer of CPC, told Bloomberg that the nonprofit would work with building owners to restructure or refinance their debt and assess needed renovations. He estimated it could take 10 years to work out the loans underlying the 35,000 units.