The partners are pleased to announce the closing of a $60 million transaction to preserve Los Tres Unidos, a 135-unit multifamily affordable housing development located on 112th Street and Madison Avenue in East Harlem, Manhattan. The project was financed by substantial equity investments provided by Belveron Partners and Hudson Valley Property Group, and a Fannie Mae mortgage through Prudential. The property remains subject to its U.S. Department of Housing and Urban Development (HUD) Housing Assistance Payment contract, which allows tenants to pay only 30% of their monthly income towards rent. The building occupancy serves households making less than 50% Area Median Income (AMI).
“We are very proud to have provided our expertise and capital to help NERVE retain its East Harlem community asset, an affordable property in a vibrant community just a block from Central Park. We are grateful to NERVE and NCV for selecting us as their partner, to Belveron for continuing to be a reliable equity partner, and to New York City HPD and HUD for utilizing its preservation tools to ensure the project remains quality affordable housing for years to come,” – stated Jason Bordainick, Managing Partner of Hudson Valley Property Group.
The new owner, a NERVE-NCV-HVPG partnership, plans to keep the property affordable for the long-term, understanding the development’s crucial role providing quality housing for low-income residents in a rapidly gentrifying Manhattan neighborhood. The NERVE organization was formed in 1975 and was one of the original developers of Los Tres Unidos. In 2017, NERVE exercised its right-of-first-refusal (ROFR) when its partner endeavored to sell. NERVE brought in new partners, NCV, HVPG, and Belveron for immediate equity and acumen to match the competing offer and secure the property for a January 2018 closing.
“When Robert Anazagasti of NERVE contacted NCV and expressed his desire to exercise their ROFR and purchase Los Tres Unidos, I jumped at the challenge of raising that much capital in the 30-days permitted under the agreement. By tapping NCV’s network of operators and investors we found the perfect partners in HVPG and Belveron to execute. Of course, the real winners are the tenants of Los Tres Unidos who will continue to live in high quality affordable housing in the emerging neighborhood of El Barrio (East Harlem) as the project will remain affordable for the foreseeable future,” stated Keith Gordon, Managing Partner of NCV Capital Partners.
“NERVE continues to provide low income housing and housing preservation for our community of El Barrio/East Harlem,” added Robert Anazagasti, President and General Manager of NERVE Inc.
“We really love working in New York. There is a preservation ethos here that permeates every opportunity we invest in. Great agencies, intrepid partners, sustainable properties, and delighted residents. Belveron appreciates our small role in this great affordable housing ecosystem,” commented Louis A. Harrison, Belveron Partners.
The new ownership group will address immediate capital needs at the property as well as energy efficiency upgrades and replacement of security cameras throughout the development. Agency support for the project was essential in executing the Los Tres Unidos preservation acquisition and ensuring its long-term affordability. Specifically, New York City and HPD assigned an Article XI tax abatement, and a new project-based Section 8 contract was approved by HUD.
“One of HUD’s top priorities is the preservation of affordable housing and I congratulate everyone that has invested their time and resources to ensure that the Los Tres Unidos Apartments remain accessible to low-income families,” said Lynne Patton, HUD Regional Administrator for New York and New Jersey. “The HUD Housing Assistance Payments Contract will guarantee these units remain affordable for the next 20 years.”
This marks HVPG’s second New York City affordable housing investment with Belveron. In 2015, the two firms acquired 600 units of low- and moderate-income housing in the Bronx (Keith Plaza and Kelly Towers). The purchase of Los Tres is the first transaction to be financed utilizing equity raised through HVPG’s private equity fund focused on the acquisition of affordable housing, Hudson Valley-Preservation Fund (HV-PF). As a result of these preservation endeavors, no residents were displaced and the properties remain affordable for decades to come. Additionally, preference on some Los Tres apartments has been reserved for formerly homeless families.
Attorney firms that advised on the transaction include: Smith, Gambrell & Russell, Broad and Cassel, Hessel Aluise & Neun, Nixon Peabody and VLP Law Group.