Area Property Partners Sells Bronx Housing Complex for $51.5M

by: Katherine Clarke
source: The Real Deal

Global One Real Estate Fund, an entity controlled by Robert Nelson of Nelson Development, has purchased the Lafayette-Boynton Houses, a middle-income rental complex in the Bronx, Nelson told The Real Deal today.

Global One paid Area Property Partners $51.5 million for the 972-unit property, according to city property records, in conjunction with a joint venture between L + M Development Partners and Citibank.

Nelson Development currently owns Hillside Homes, a 144-unit building on Seymore Avenue in the Bronx, and Atlantic Towers, a 718-unit complex on Atlantic Avenue in Brooklyn.

Located in the Soundview section of the Bronx, Lafayette-Boynton is a 1 million-square-foot, four-building complex. Nelson said he has agreed to keep it a middle-income property for the next 40 years in exchange for a substantial tax abatement from the city’s Department of Housing Preservation and Development.

Area, formerly Apollo Real Estate Advisors, purchased the property in 2006 along with Lafayette-Morrison, an adjacent development that it turned into affordable co-ops for existing tenants. The deal was valued at approximately $100 million. The two complexes, built under the state’s Mitchell-Lama program as subsidized housing for moderate-income New Yorkers, had fallen into disrepair and were taken over by the state in the late 1980′s.

It was not immediately clear if Lafayette-Boynton was originally intended to go the co-op route, though sources said the business model has not been entirely successful at Lafayette-Morrison.

Area declined to comment on the recent sale.

The new owners will launch a $14 million program to improve both common areas and building systems at Lafayette-Boynton, Nelson said.

“We are going to replace the windows with new condo quality windows that are more than three times as energy efficient,” he said. “We are going to convert from oil heat to gas heat, which will decrease the carbon footprint of the property and improve air quality. Finally, we are going to carry out a number of smaller projects that will greatly improve heat distribution and monitoring.”

For some local tenants groups, like the Urban Homesteading Assistance Board, the transaction comes as somewhat of a relief.

“It doesn’t appear from an outside perspective that Apollo’s intentions were to preserve the affordability of the units,” said Dina Levy, UHAB’s Director of Organizing and Policy. “Having them gone and having a new preservation partner — I’m being cautious here — it could be a turn of good fortune for the tenants.”
With additional reporting by Adam Pincus

– See more at: http://therealdeal.com/blog/2011/11/29/area-property-partners-sells-bronx-housing-complex-for-51-5m-buyer-says-he-will-keep-the-units-affordability/#sthash.nzsQrP7q.dpuf