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Fairstead, a purpose-driven, vertically integrated real estate company committed to sustainable development and the creation and preservation of high-quality housing, and Invesco Real Estate, a global real estate investment manager, today announced the companies have acquired 1,904 affordable units across 48 buildings and 2.3 million square feet in the Bronx in what is the largest deal of its kind in New York this year by both portfolio and investment size.
“Fairstead is committed to creating high-quality, sustainable housing, and an important part of our strategy is preserving and enhancing existing affordable housing stock so it can remain a great place to live for the long-term,” said Jeffrey Goldberg, CEO of Fairstead. “We are proud to be serving thousands of Bronx families, giving them peace of mind that their homes will remain affordable and providing them with access to important social services and programming.”
Invesco Real Estate is committed to being good stewards of the environment and to implementing ESG+R best practices. It understands that the societal impact of the built environment is an important factor in creating and stabilizing communities and maintaining social cohesion. Invesco Real Estate believes that affordable housing is one sector where it can have an impact in local neighborhoods, helping to drive change. Currently, the firm owns over 5,000 affordable housing units in ten states across the country.
The portfolio was previously managed by Property Resources Corporation (PRC) and includes properties in Longwood, Tremont, Crotona Park, and Morrisania. PRC is one of New York City’s most prominent developers of market rate and affordable housing with over 6,500 units representing over $1 billion built or redeveloped throughout its history in addition to a current pipeline of projects of more than 2,000 units totaling $600 million of development. PRC chose Fairstead because of their dedicated track record creating positive social, economic, and environmental change for residents.
“PRC is immensely proud of the work our team has done over 50 years to build and preserve affordable housing in the Bronx,” said Ben Linde, PRC Principal. “We are grateful that the sale of this portfolio will enable us to build upon that legacy and extend our ability to provide homes and create stability for even more families, both in the Bronx and throughout the New York area.”
Fairstead recently announced a new $500 million equity commitment to strategically grow the company’s operations, including expanding its multi-family housing portfolio and enhancing the firm’s prop tech, sustainability, and community impact programming. Fairstead works with community leaders, advocates, and residents to provide programming and services that improve resident health outcomes, provide financial literacy, offer job training, bolster internet access, and provide opportunities for civic engagement, and will bring this programming to the Bronx portfolio.
“Fairstead and Invesco Real Estate are bringing in new capital to this portfolio through an innovative capital structure that will allow us to make strategic investments to improve the sustainability of the buildings and enhance the lives of residents through social services and programming,” said Brett Meringoff, Managing Partner, Development, at Fairstead.
Berkadia and Deutsche Bank provided innovative capital solutions for Fairstead and Invesco Real Estate.
“Berkadia is thrilled to once again partner with the innovative team at Fairstead to deliver this landmark deal in New York,” said Matthew Napoleon, Senior Managing Director, Berkadia. “This deal exemplifies Fairstead’s creative and thoughtful approach to affordable housing,” added Gemma Geldmacher, Senior Director.
“DB is committed to providing innovative capital solutions to create and preserve affordable housing properties nationwide. We are thrilled to be able to partner with Fairstead to support the long-term preservation of affordable housing in New York,” said Jeffrey Baker, Director, DB. “DB is proud to partner with Fairstead to provide acquisition capital for this portfolio. We are highly confident in Fairstead’s ability to preserve affordable housing in such a high need area for many years to come and know that this will have a significant positive impact for the Bronx community,” added Charles Seymour, Director.
Through Fairstead’s Community Impact work, the company will continue to support the longstanding partnership PRC established with the Renaissance Youth Center in Morrisania, and work with local organizations for additional programming.
“The Renaissance Youth Center has been serving the South Bronx for 20 years with innovative and fun programming that today reaches 4,000 young people every week. We are thrilled to partner with Fairstead to continue our work with this portfolio, bringing music classes and enriching engagement to its families,” said Bervin Harris, President and CEO of Renaissance Youth Center.
Fairstead is now the owner and property manager of the 48 properties, which are a mix of five- and six-story existing and newly constructed buildings, some with ground-floor community retail. All the units are operated under a regulatory agreement serving residents earning between 30% and 100% of the area median income (AMI). Fairstead will preserve the affordability of these units, provide upgrades to the buildings, and deploy social services and community programming.
The transaction was led by Victor Sozio, Executive Vice President, Investment Sales, Ariel Property Advisors, and Shimon Shkury, President, Ariel Property Advisors, representing both Fairstead and PRC.
“Ariel Property Advisors is proud to work with PRC and Fairstead on what is the largest affordable housing deal in New York this year,” said Victor Sozio. “We look forward to Fairstead’s continuation of PRC’s responsible stewardship of these affordable units, as well as Fairstead’s plans to enhance the experience of residents with programming and services.”
This purchase is part of Fairstead’s ongoing commitment to creating and preserving affordable housing across the nation. Last week, Fairstead announced the acquisition of Gateway, 160 apartments in Lake Jackson, Texas, where it will preserve and expand its affordability. In November, Fairstead acquired the Essex Plaza portfolio in Newark, New Jersey, adding 691 affordable units to its portfolio. Fairstead will invest more than $27 million for sustainable renovations and improvements, as well as on-site support services for seniors. The Alexandria Redevelopment and Housing Authority (ARHA) recently announced that it had selected Fairstead in partnership with Mill Creek Residential and The Communities Group to redevelop the Samuel Madden Homes in Old Town Alexandria, where the company will create a sustainable mixed-use community with affordable, workforce and market-rate housing.
About Fairstead:
Fairstead is a purpose-driven vertically integrated real estate developer specializing in creating sustainable, high-quality housing. Since 2014, Fairstead has acquired or developed more than $4 billion in property. With offices in New York, Maryland, and South Carolina, Fairstead’s team manages 90+ communities across the country and runs its comprehensive real estate platform, which includes acquisitions and development, venture capital investments in prop tech, design and construction, energy and sustainability, property management, marketing, and leasing. The firm also administers one of the industry’s most proactive community impact programs to provide on-site support services to residents. For more information, visit www.fairstead.com.
About Invesco Real Estate:
Invesco Real Estate is a global leader in the real estate investment management business with $87.0 billion in real estate assets under management, 597 employees and 21 regional offices across the U.S., Europe and Asia (as of September 30, 2021). Invesco Real Estate has been actively investing in core, value-add and opportunistic real estate strategies since 1983. Invesco Real Estate is the real estate investment center of Invesco Ltd., an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life www.invesco.com.
About Property Resources Corporation:
PRC is a full-service real estate development firm specializing in all classes of multifamily housing. Established in 1971, it has a track record of success with ground up, resident-in-place preservation and adaptive re-use housing development. With dedicated, in-house design, construction management, property management, and development divisions, PRC is capable of taking on any scale project in the New York metropolitan area. www.prcny.com
