Wells Fargo Provides $90M Acquisition Loan for Two Bridges Affordable Complex
L+M Fund Management has finally secured Knickerbocker Village after a lengthy lawsuit from tenants stymied the deal
By Brian Pascus May 13, 2024 11:38 am
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A Great Depression-era development officially has a new owner.
L+M Fund Management, an affiliate of L+M Development Partners, has secured $90.6 million in financing to acquire Knickerbocker Village, a 1,590-unit affordable housing complex in the Two Bridges neighborhood of Lower Manhattan. PincusCo first reported the financing.
Wells Fargo (WFC) provided the acquisition loan for L+M Fund Management, which bought the property on April 24 from Stellar Management for $84.6 million, according to property records. L+M partner Eben Ellertson, who heads the firm’s acquisitions strategies, signed the loan, under the limited liability company Knickerbocker Village. The loan was subsequently transferred from Wells Fargo to Fannie Mae, according to property records.
Located at 10-20 Monroe Street in Manhattan between the Brooklyn Bridge and Manhattan Bridge, Knickerbocker Village is an affordable housing development constructed in 1934. The entire complex spans 1.3 million square feet across 12 buildings.
The purchase by L+M Fund Management has not been without controversy. Tenants of Knickerbocker Village waged an unsuccessful lawsuit beginning in 2022 that saw tenant representatives sue the New York State Division of Homes and Community Renewal (DHCR), arguing the agency signed off on a deal that would lead to higher rents and displaced tenants under new ownership. The lawsuit was dismissed in October 2023.
The Knickerbocker Village Tenants Association has since negotiated a deal that keeps rents frozen until 2025 before rent increases for existing tenants rise no higher than 2.5 percent annually going forward. L+M Development has also promised to spend over $55 million on tenant improvements, with many of those capital improvements financed through revenue generated by nearly 400 Section 8 federal renting housing vouchers the sponsor secured from the New York Housing Authority (NYCHA), according to The Real Deal.
Federal housing vouchers are typically used to preserve tenant rent revenue at an affordable level while simultaneously funding building improvements.
James Yolles, spokesman for L+M Fund Management, said the firm “has appreciated the opportunity” to engage in productive discussions with Knickerbocker tenants over the years and confirmed plans to keep the entire development affordable.
“We are looking forward to working closely with all Knickerbocker Village residents and local elected officials to ensure a smooth transition and critically needed rent stability for many years to come,” said Yolles.
Brian Pascus can be reached at bpascus@commercialobserver.com
