Centerline Capital Group refinances two multifamily properties for Tahl Propp Equities

Centerline Capital Group has refinanced and preserved 412 units of affordable housing in Harlem. The borrower, Tahl Propp Equities, will undertake $4 million in renovations and upgrades to the properties and preserve their affordability as low-income housing for an additional 30 years. Centerline arranged for a total of $91.9 in fixed rate financing through Freddie Mac. The term of the two Freddie Mac facilities is ten-years with a 30-year amortization schedule. The majority of the proceeds were used to refinance existing mortgage debt carrying above-market interest rates; a portion of the proceeds will be reinvested to address capital needs at the properties, and remaining proceeds are a return of capital to the borrower enabling Tahl Propp to reinvest in additional properties in the Harlem/Northern Manhattan market. The borrowing entity was led by Joseph Tahl and Rodney Propp. The properties include: * AK Houses Apartments: AK Houses was built in 1980, contains 157 residences and is located at 112-126 East 128th St. The development consists of one 12-story elevator building on a 1.47-acre site. The property is located adjacent to and shares an exterior courtyard with 1775 Houses Apartments. The unit mix includes 10 one-bedroom apartments, 67 two-bedroom units, 62 three-bedroom apartments, and 18 four-bedroom units. Centerline provided a loan of $37.5 million to refinance this property. * 1775 Houses Apartments: 1775 Houses was also built in 1980, contains 255 residences and is located at 107-129 East 126th St. The development consists of one 11-story elevator building on a 1.76-acre site. Centerline provided a $54.4 million loan to refinance the property. The unit mix includes 68 one-bedroom units, 115 two-bedroom apartments, 62 three-bedroom units and 10 four-bedroom apartments. As part of this transaction, both properties entered into long-term (20-year) project based Section 8 Housing Assistance Payment (HAP) contracts with HUD. In addition, Tahl Propp entered into 30-year regulatory agreements with HPD for buildings, receiving partial 30-year real estate tax abatements under Article 11 and agreeing to utilize both buildings for affordable housing during the term of the agreements. The borrower's $4 million capital investment to both buildings will address immediate capital needs at the properties, including new elevators and roofs, boiler replacement and unit interior and common area improvements. "These properties are very well-located and have averaged 98% plus occupancy over the last 12 months. The Manhattan multifamily market continues to be one of the strongest markets in the nation with significant upward pressure on rents, making Tahl Propp's 30-year commitment to low-income affordability critically important," said Jim Gillespie, managing director at Centerline. "In addition, the borrower is an experienced owner, operator and developer of affordable housing assets that specializes in affordable preservation in the Harlem area of New York." "The closing of both loans - from start to finish - was completed in a swift 44 days," said Phil Melton, senior managing director at Centerline."In addition, both properties entered into 30 year Regulatory Agreements with the City of New York Department of Housing Preservation and Development (HPD), ensuring the long-term affordability of the properties. At Centerline, we continuously look to identify affordable housing opportunities that are attractive to our investors and also make a significant impact on the communities where they exist." "Centerline's affordable housing lending experts were impressive. They not only helped advise us on the financing, but also coordinated across multiple entities to provide us with the most attractive financing within a short time frame," said Tahl. "We are pleased to be part of an effort to keep homes affordable for 412 families for another 30 years. With the upcoming renovations, the apartments will be a place that the residents can be proud to call home," said Kimball Griffith, vice president of Affordable Housing Production and Investments for Freddie Mac. Property amenities at both buildings include an outdoor playground and sitting area, and common area amenities include a laundry room, a community room, on-site management/ recertification office and an on-site security office. Centerline is a Fannie Mae DUS lender, Freddie Mac seller-servicer, FHA-approved mortgage provider, bridge and CMBS lender, and source for other forms of alternative capital.