Rose Community Capital (RCC), the lending arm of Jonathan Rose Companies focused on the origination, underwriting and placement of FHA insured multifamily mortgages, has arranged bridge acquisition financing for Sunny Garden Apartments in La Puente, CA through their new Rose Community Capital bridge loan program. The $15 million short-term financing represents the first loan to close under the new program, aimed specifically at preserving existing affordable housing.
Sunny Garden Apartments, a joint venture of developer Alliance Property Group Inc. (APG) and Community Revitalization & Development Corporation (CRDC), a non-profit corporation that partners with private developers to carry out its mission of providing quality affordable housing, purchased the 13-story, 96-unit affordable and senior multifamily property from La Puente Gardens. Marcus & Millichap's Joshua Ross and Eli Appel represented the buyer and seller.
“We are very pleased to announce the first closing in our new RCC Bridge Loan program. We’ve worked closely with our funding partner, IMPACT Community Capital, to structure a bridge lending initiative that will help secure the affordability of Sunny Garden, and similar projects, well into the future,” said Kelly Boyer, president of Rose Community Capital. “At this project, most residents have household incomes at or below 30% AMI and would face economic displacement if the project was converted to market rate. This acquisition and the placement of public subsidies through the County of Los Angeles have insured that Sunny Garden Apartments remains affordable for current and future residents.”
Subordinate debt was provided by Century Housing Corporation, without which this deal would not have been possible.
“APG, under the leadership of Danielle Curls Bennett, was the ideal developer with whom to roll out a new product. RCC has a long relationship with APG and we’re very glad we could make this capital available to our partner,” added Ms. Boyer. “We look forward to making this bridge to FHA financing available to many more investors and developers in the affordable housing community.”
The developer plans an extensive renovation and improvement program at the property for a total investment of more than $33 million. Built in 1992, the building at 13712 Sunkist Drive sits on 1.64 acres in the central portion of La Puente in close vicinity to shopping, services and recreational amenities.
The project sponsors will work with Partner Energy and Musser Architects, Inc. to achieve as many energy efficiencies as possible at Sunny Garden and meet the California Green Building codes. In addition, the developer has elected to design improvements to achieve a 20% improvement over the property’s baseline energy usage. These design elements will include EnergyStar appliances; low flow toilets and shower heads; water conscious landscaping; LED lighting; solid surface countertops and cabinets; and other energy efficient measures.
The development will be repositioned by a Federal Housing Agency (FHA) debt and equity execution structured by RCC, an FHA specialist with a 20-year track record navigating government programs and working with government offices to develop affordable housing.
The County of Los Angeles supports the project and is making available project-based vouchers that will cover 92.6% of the apartments. RCC is arranging permanent financing through a FHA 221(d)(4) loan in the amount of just over $20 million and the new owners have applied for an award of 4% Low Income Housing Tax Credits (LIHTCs) totaling nearly $7.9 million and a loan from the Los Angeles County Development Authority?(LACDA) of more than $2.1 million.
ABOUT ROSE COMMUNITY CAPITAL
Rose Community Capital (RCC) is a designated FHA MAP lender and the financing arm of Jonathan Rose Companies, focused on the origination, underwriting and placement of FHA insured multifamily mortgages. RCC has a successful 20-year track record navigating government programs and working with government offices to develop affordable housing, closing nearly $600 million in affordable housing loans working with HUD offices throughout the United States. For more information visit http://www.rosecompanies.com/community-capital/
About IMPACT
Founded in 1998 by leading insurance companies to generate institutional quality, purpose-driven investments, IMPACT Community Capital is a pioneer in impact investing and was among the first to use securitization to deliver capital in scale for affordable housing. The firm has now originated $2 billion of institutional quality investments in affordable housing, healthcare, childcare and economic opportunities. IMPACT is a one-stop shop for investors seeking investments aligned with the SDGs without compromising investment quality. For more information:?impactcapital.net.
