Rockport Mortgage Seals $140M Loan for NJ Affordable Housing Project
As part of the refinance, the project's affordability will be extended through 2059
LIHC Investment Group has closed a $140 million loan for Parkview Towers, a 688-unit affordable housing property located in West New York, N.J., Commercial Observer has learned.
Rockport Mortgage Corporation provided the FHA Section 223(f) loan.
Situated on 5.32 acres, the development overlooks the Hudson River with views of the Manhattan skyline. A 10-minute walk from Port Imperial ferry terminal, the asset comprises two 24-story buildings as well as a one-story maintenance storage building, a five-story parking garage and one ground floor commercial space.
Of the property’s 688 residential units, 684 are covered by a project-based Section 8 HAP contract. As part of the refinance, LIHC has agreed to enter into a new, 20-year mark-up-to-market Section 8 contract. At the expiration of the contract, LIHC will extend it a further 19 years, ensuring the property will remain affordable through 2059.
“We are pleased to partner with Rockport on this major refinancing effort and to commit Parkview Towers to 39 more years of deep affordability under Section 8,” Andrew Gendron, a principal of LIHC Investment Group, said. “So far this year, we’ve extended affordability protections for 1,790 units across six properties in New York and New Jersey thereby providing peace of mind for vulnerable adults and families. This is particularly important in today’s environment as the ongoing pandemic has revealed the true scarcity of safe, clean, and affordable rental homes in communities across the country.”
Rockport was familiar with the property, having also provided the previous round of financing.
“We’ve had a relationship with this borrower for a while and we actually provided a loan on this property in 2016,” John Dromey, a senior vice president at Rockport Mortgage, told CO. “That was a HUD 241(a) loan, which is a supplemental loan to an existing HUD-insured loan. The borrower was able to make energy upgrades and improve energy efficiency by around 50 percent.They saved so much money in operational savings that we took another look at it a couple of years later and saw that this deal worked really well as a FHA 223 refinance.”
The refinancing also allows LIHC to undertake an $8 million renovation campaign of the units, as well as modifications to increase the number of accessible units at the buildings. Occupancy has averaged over 98 percent over the past three years.
Boston-based Rockport is ranked as one of the top FHA multifamily lenders in the U.S. In addition to Parkview Towers, it has also provided FHA 223 (f) financing for several other LIHC-owned properties, including a $74 million loan for Little Italy Restoration Apartments in New York; $42.5 million FHA 223(f) loan for Malcolm Towers in Fort Lee, N.J; and a $27 million loan for Mansion Apartments in Pine Hill, N.J.
“We’ve been busier than ever,” Dromey said. “In March, when [COVID-19] started, we saw things just skyrocketing. COVID is a terrible situation, and affordable housing preservation is more important than ever now.”