New York RAD PortfolioKyle Shoemaker
The second piece of a two property New York RAD Portfolio, with rent supplement contract and HUD 236 mortgage was successfully closed last week. The two properties, Cedars of Chili and Indian Trails, were successfully sold to Winn Companies, from Boston, Massachusetts, who are completing tax credit renovations of each. The Cedars of Chili deal was financed with tax exempt bonds and 4% low income housing tax credits (LIHTCs), and Indian Trails was financed with 9% LIHTCs. The buyer and seller worked with AHIB and Nixon Peapody to successfully convert the property subsidy contracts to HAP contracts through the second phase of HUD’s Rental Assistance Demonstration Program, or RAD II.
AHIB was able to create a competitive market for the New York RAD Portfolio among qualified buyers from around the country, leading to pricing well above several offers that had been submitted directly to the owner prior to marketing. Given the broker’s knowledge of the opportunity possible through RAD II, AHIB was able to set and defend an aggressive pricing target that was higher by a significant margin than what many experienced New York developers thought was feasible. The deals closed within a small percentage of this target, with two back-up options lined up at virtually the same price.
The development execution faced many challenges, including multiple tenants with income levels too high to qualify for RAD or LIHTCs. The seller worked diligently with the buyer on providing legal moving incentives and setting new move-in standards to prepare the property for as many units as possible to qualify for the conversion. The work was not easy, but paid off as the deals closed at premium pricing.
AHIB is an independently owned firm that has a dedicated focus selling affordable housing investments, including both Section 8 and Section 42 properties. Our team of brokers works this niche within specific geographies throughout the country, bringing an efficient process that is effective at producing premium value while limiting disruption to an owner’s on-going business. Please contact us today to discuss how our team can be a resource to your business.