Multi-Site Rural Preservation + Rehabilitationsee portfolio
Preservation + Rehabilitation
Rea Ventures partnered with Churchill Stateside Group (“CSG”), a real estate financial services company serving developers and investors in the multifamily housing, renewable energy and entertainment tax credit industries, to close a $71.16 million affordable housing transaction.
The rural housing portfolio consists of 20 affordable housing properties located throughout the state of Georgia. The properties are located in 18 markets, the majority of which were constructed in the 1980’s and 1990’s using the USDA 515 Loan Program and Section 42 low-income housing tax credits. William Rea, Managing Partner of Rea Ventures Group, previously developed the properties and continues to stand behind them today.
The acquisition and rehabilitation of the 620 units includes construction and permanent financing from Churchill Stateside Group guaranteed by the USDA 538 loan program, subordination and re-amortization of the original USDA 515 loans, short term tax exempt bonds sold by Merchant Capital and equity proceeds from Churchill Stateside Group’s investment in the 4% federal and state LIHTC.
CSG’s affordable housing team provided financing by working with multiple agencies and parties to secure both public and private funding, including:
USDA 538 Guaranteed Rural Rental Housing Loan – $14.25 million construction and permanent financing.
USDA 515 Loan – restructure of $15.95 million of original USDA 515 debt.
Tax Exempt Bonds – $24.65 million in short-term bonds issued by the City of Cordele.
Federal LIHTC – investment of $11.15 million for the acquisition of federal credits awarded by the Georgia Department of Community Affairs.
Georgia State LIHTC – investment of $5.16 million for the acquisition of state credits.
The scope of the rehabilitation plan consists of modernizing interiors with flooring, energy efficient appliances, kitchen and bathroom fixtures, as well as HVAC, plumbing, electrical, and hot water heaters. Externally, improvements include roofs, siding, energy efficient windows and doors, and upgrades to community centers, parking areas, and accessibility updates. The average hard cost of improvements are expected to be $25,000 per unit. During renovations, none of the tenants are expected to be displaced, and of the 620 apartment units, 66% will continue to receive Section 521 Rental Assistance provided by USDA. Upon completion of renovations, each property will offer superior affordable housing options for low-income tenants in the communities they serve.
To date, six of the twenty communities have been renovated. Rea Ventures will continue to move forward with the rehabilitations units all of the twenty affordable housing communities are complete.
“The preservation of over 600 apartment units is no easy feat. We knew we had to pair up with someone as strong as Rea Ventures for an endeavor this large. Rea put a highly competent team of professionals together who can all say that they contributed to a safe, decent and affordable place for hundreds of Georgia residents to call home” said Brent Watts, Senior Vice President and National Director of Affordable Housing.”
The successful execution of this highly complex transaction demonstrates the ability of Rea Ventures to perform at a high level while engaging all parties involved. Rea Ventures was instrumental in helping us achieve the state-wide mission of providing quality affordable housing throughout Georgia.
Rea Ventures Group is known for its ability to develop innovative financing structures and to close complex deals, which preserve and develop long-term housing affordability, for seniors, individuals with disabilities and family.
Rea Ventures Group has development, constructed and owned multifamily rental housing since 2001. Rea Ventures continues to provide a reliable, safe and sustainable product to meet the nation’s rental housing needs.
As an organization, Rea Ventures Group strives to be progressive in energy-efficient practices by identifying sustainable opportunities in the development, design, construction stages, and on-going management of our communities.