NEW YORK, NY - Red Stone Partners announced today it closed a $74,000,000 tax-exempt financing and $35,000,000 direct equity placement used for the preservation and rehabilitation of a low income multifamily housing property in Brooklyn, New York. The property, Linden Plaza, consists of five high rise buildings containing 1,527 apartment units.
Red Stone worked in conjunction with Wachovia Multifamily Capital and Freddie Mac to provide The DeMatteis Organization with a new tax-exempt debt structure specifically designed for the rehabilitation and preservation of low income Mitchell-Lama, HUD Section 8 and 236 properties. Red Stone provided first loss mezzanine credit enhancement for the debt facility and also arranged for the direct placement of $35,000,000 in tax credit equity with a single investor. NYC Housing Development Corporation issued the tax exempt multifamily housing bonds.
The DeMatteis Organization plans to spend approximately $52 million towards the renovation of the property. In addition to common area upgrades the tenants will also receive refurbished units with new kitchens and baths. All the renovations will be completed with no tenant displacement.
"This structure provides maximum loan proceeds and a single source of funds for both construction and permanent financing," according to Jim Gillespie, Managing Director of Red Stone.
Red Stone is now offering this financial product to owners and developers of low income multifamily apartment properties throughout New York City and other major metropolitan areas.
Red Stone is a national real estate finance company focused on providing innovative financial products to the affordable housing industry. Capitalized by an investment fund of Prudential Real Estate Investors, Red Stone provides a full range of debt and equity capital including: tax-exempt bond financing, tax credit equity investment, HUD-approved FHA insured lending, mezzanine and participating debt, and conventional equity.
Source: Business Wire