Preservation Development Partners acquires Oakwood Towers for $21 million

Orange, NJ Preservation Development Partners, a joint venture of developers Francine Kellman, Brian Raddock, Donald Capoccia, Joseph Ferrara and Brandon Baron, arranged the acquisition of Oakwood Towers, a senior care apartment complex. The rental property, located at 400 Oakwood Ave., was purchased for $21 million. The new owners have planned for an additional $8 million in major capital improvements to the property, $34,000 per unit. All of the units at Oakwood Towers are one-bedroom apartments, with the exception of an on-site superintendent’s dwelling. All units at the property are set-aside for tenants earning no more than 60% of Area Median Income (AMI). Oakwood Towers benefits from a Project Based Section 8 Contract (HAP Contract) which will be renewed for 20 years. The Section 8 Contract, which subsidizes tenants’ rental payments, will provide the community with quality affordable senior care housing. In addition, the HAP contract will protect the property against conversion to market rate housing. Ms. Kellman, PDP principal, said, “Orange, New Jersey has experienced substantial growth in retail store development in recent years. New shopping centers have sprouted up throughout the area, and this has helped Orange and its neighboring communities to provide jobs to its residents. With economic development incentives, an excellent public transportation network, and close proximity to major highway arteries, this part of northern New Jersey has become an attractive place to invest and develop.” Mr. Raddock, PDP principal, said, “The purchase and rehabilitation of Oakwood Towers through the use of tax-exempt bonds, and the benefit of new 20 year HAP Contract will eliminate the risk of 236 affordable senior care housing units in Orange, New Jersey from being converted to market rate units. With a limited supply of affordable housing in the area and high demand for housing in general, this project will preserve affordable senior care housing and thus provide a long-term benefit to the community.” The building’s rehabilitation construction, valued at approximately $34,000 per unit, will begin immediately. No tenants will be displaced during the construction, which is expected to be completed in mid-2015. PDP will modernize Oakwood Towers’ outdated electrical systems. In addition, the property’s parking facilities will be upgraded. Individual units will be rewired and will receive new kitchen cabinets, countertops and appliances. Common areas will be upgraded with new hallways, electrical systems and fire prevention devices. Community spaces will be upgraded as well. Ms. Kellman added, “With these upgrades, Oakwood Towers will provide comparable or better quality senior care housing than similar housing in the market area.” Oakwood Towers financing was completed with tax-exempt bonds, credit enhanced by Freddie Mac through its Low Income Housing Tax Credit (LIHTC) Mod Rehab program. The project was also capitalized with equity from an investor in the project’s 4% low income housing tax credits.