CHICAGO, IL - Wells Fargo & Company and Related Companies today announced the acquisition of Parkway Gardens, a 694-unit affordable housing apartment property in the Southside of Chicago. The development will be preserved as affordable housing for an additional 30 years. Related Companies has also committed to $40 million in physical, mechanical and structural upgrades.
Related Companies, which acquired the property through its affordable housing preservation division, Related Affordable, will own and manage the property and is committed to maintain it as affordable housing for 30 years. Well Fargo & Company has made a $36.5 million equity investment for the purchase and renovation. The Wells Fargo investment consisted of a $26.6 million direct Low Income Housing Tax Credit equity investment and a $9.9 million direct Federal Historic Credit investment. The transaction also received $59.5 million bonds from the Illinois Housing Development Authority under the New Issue Bond Program to facilitate the rehabilitation of the property and the preservation of affordable housing. Fannie Mae, via Oak Grove Capital, provided credit enhancements for the loan.
“We are excited to participate in the preservation of Parkway Gardens,” said Korbin Heiss, SVP of Wells Fargo Community Lending and Investment. “This large investment will preserve needed affordable housing in the Southside of Chicago in addition to creating construction jobs associated with the project’s comprehensive renovation.”
Parkway Gardens, located on the Southside of Chicago, consists of 35 buildings on a 13-acre parcel. It was built in the mid-1950’s as co-ops and converted to rentals in the mid-1970’s under the HUD Section 236 IRP program. In 1988 it was purchased from HUD by private investors. Related Companies will substantially renovate the buildings including the mechanical systems, site improvements and in-unit upgrades. Additional amenity spaces will also be created for the residents. Renovations are expected to amount to over $57,000 in upgrades per unit. Related Midwest, Related Companies’ Chicago office, will oversee the renovations.
“Related has a 40-year commitment to the creation and preservation of affordable housing and we are thrilled to have been able to partner with Wells Fargo, Fannie Mae, and Oak Grove Capital to acquire nearly 700 units of critical housing stock in Chicago at Parkway Gardens and preserve the affordability for decades to come,” said Mark Carbone, President of Related Affordable. “Affordable housing is critical to the growth and stability of our nation’s cities and necessary for the continued success of the American economy. Related will continue to look for ways to create and preserve affordable housing opportunities and ensure residents of all income levels have access to a quality place to live and raise their families.”
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With approximately 275,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
Related Companies is the most prominent privately-owned real estate firm in the United States. Formed over 39 years ago, Related is a fully-integrated, highly diversified industry leader with experience in virtually every aspect of development, acquisitions, management, finance, marketing and sales.
Headquartered in New York City, Related has offices and major developments in Boston, Chicago, Los Angeles, Las Vegas, San Francisco and South Florida and boasts a team of approximately 2,000 professionals. The Company’s existing portfolio of real estate assets, valued at over $15 billion, is made up of best-in-class mixed-use, residential, retail, office, trade show and affordable properties in premier high-barrier-to-entry markets. In 2006 Related acquired Equinox(R) Fitness Clubs, further expanding the company's capabilities into the health and fitness arena and enhancing the value of its properties by incorporating an exclusive, branded amenity into the lifestyle offering.
Related Affordable develops, acquires and preserves affordable housing throughout the nation. In the area of acquisitions and refinancing, the company pursues properties that meet one of the following criteria: Section 8 properties with project-based contracts; Section 236 properties in need of rehabilitation; Section 42 LIHTC properties with expiring low-income restrictions; Section 515 FmHA properties with loans that can be prepaid; or other assisted properties, including HODAG, HOME, federal or state-financed public housing. Related actively looks for affordable housing opportunities through the development, acquisition and refinancing of low, moderate and mixed-income properties around the country. Since 1972, Related has developed, acquired or financed over 300,000 units of affordable housing.