A pair of big-time affordable housing investors have scooped up an affordable housing portfolio in East Harlem.
LIHC Investment Group and Camber Property Group bought the 229-unit, nine-building portfolio, located mostly on East 118th and East 119th streets, from Vitus Group for $68 million.
The developers plan to keep the complex, known as Lexington Court, affordable for at least the next 40 years thanks to a new Section 8 contract and an agreement with the city’s Department of Housing Preservation & Development and Housing Development Corporation.
To finance the acquisition, LIHC and Camber secured a $73.1 million FHA risk-share loan with the Housing Development Corporation. They also put down $11.5 million of their own equity.
LIHC and Camber plan to make $10 million worth of improvements to the properties, including plumbing and electrical upgrades, a new security and intercom system and masonry and façade repairs. Under the agreement, tenants will not contribute more than 30 percent of their monthly adjusted income toward rent.
“There are very few asset classes with more proven resilience and staying power than affordable housing and competition for deals in the five boroughs remains extremely high,” LIHC’s Andrew Gendron told The Real Deal.
The properties range from four to six stories. Most were built in 1920.
Vitus Group, formerly known as Pacific Housing Advisors, purchased the properties in 2010 for $52 million, according to Crain’s. Prior to Vitus’ purchase, the properties had failed a U.S. Department of Housing and Urban Development inspection and had not seen any major improvements in 35 years.
LIHC and Camber have partnered together in the past. In January 2020, the two firms, along with Belveron Partners, bought eight affordable housing buildings in the Bronx from Cammeby’s International Group for $170 million.