The Real Deal New York

Private real estate firms to buy 50% stake in two NYCHA complexes

Developers will invest $90M to renovate properties
December 27, 2018 12:30PM

L+M Development Partners’ Ron Moelis and Camber Property Group’s Rick Gropper (Credit: Getty Images and Camber Property Group)

L+M Development Partners, Camber Property Group and MBD Community Housing Corp. are nearing a deal to buy a 50 percent stake in two New York City Housing Authority complexes in the Bronx.

As part of the deal, the developers will take over managing NYCHA’s Baychester and Murphy houses and invest $90 million to renovate the buildings, the Wall Street Journal reported. The complexes’ 722 units will be converted into Section 8 housing, meaning the properties will receive federal funding, while NYCHA will retain control of the land.

Earlier this month, NYCHA announced that it would renovate 62,000 units in the next 10 years, mainly through converting buildings into privately managed Section 8 housing. L+M was part of a similar deal four years ago. In January 2014, a partnership of developers that included BFC Partners, L+M and K&R Preservation purchased a 50 percent stake in six NYCHA buildings. The developers began managing the properties in January 2015, and tenants in the partnership’s six buildings received Section 8 rental subsidies.

“NYCHA has clearly been in the news a lot and there’s a lot of pressure on us as one of NYCHA’s partners to take a long period of underinvestment and turn that around,” Rick Gropper, a principal at Camber Property Group, told the Journal.

Earlier this month, a federal judge approved a plan that will help NYCHA address toxic mold issues in public housing, though she rejected the agency’s broader plan for reform. Last week, Mayor Bill de Blasio and Ben Carson met to discuss how NYCHA should be overseen. If an agreement isn’t approved by Jan. 31, the Department of Housing and Urban Development might take over NYCHA. [WSJ] — Kathryn Brenzel