After picking up an 18-building Bronx portfolio for $85.5 million in June, affordable housing developer The Arker Companies is planning a $70.5 million upgrade of the properties.
Improvements will include new bathrooms and kitchens, the Wall Street Journal reported. “There will be a real sprucing up of the properties,” Daniel Moritz, one of Arker’s principals, told the newspaper.
Arker acquired the South Bronx portfolio in the borough’s Morrisania neighborhood this summer from an investment group led by Two Trees Management, which had owned the buildings since the late 1970s. The Real Deal reported the sale, but had not confirmed the $85.5 million price.
Floral Parker, N.Y.-based Arker owns 5,500 housing units in the New York area, and will rely on a combination of city and state programs to finance the deal and upgrade the units. Equity will come largely from tax credits sold to Wells Fargo & Co. and debt financing from the sale of city Housing Development Corp. bonds. Freddie Mac will provide the mortgage insurance.
Rents for all apartments are subsidized by the U.S. Housing and Urban Development Department’s Section 8 program. As part of the deal, Arker will be raising rents, but the increase will not be transferred to the tenants, whose rents are capped at 30% of their incomes.
The project helps Mayor Bill De Blasio inch toward his stated goal of preserving or creating 200,0000 units of affordable housing in the next decade. [WSJ] — Tess Hofmann