RECAP REAL ESTATE ADVISORS COMPLETES REFINANCING AND PRESERVATION OF STARRETT CITY
RECAP REAL ESTATE ADVISORS COMPLETES REFINANCING AND PRESERVATION OF STARRETT CITY|Uncategorized|
BOSTON – (December 22, 2009) – Recap Real Estate Advisors, the financial services and asset management group of CAS Partners, announced today that it has successfully completed the recapitalization and preservation of Starrett City in Brooklyn, New York. The transaction includes new financing of $531 million and significant new financial incentives to the owner in exchange for a commitment to keep the property in Mitchell Lama and other affordable housing programs for an additional 30 years.
Starrett City is the largest federally-assisted rental property in the United States and is home to nearly 15,000 residents. The refinancing is the largest single-property transaction in Freddie Mac’s history and, according to Conrad Egan, president and Chief Executive Officer of the National Housing Conference, the largest single-property affordable housing transaction ever completed.
“Completing the Starrett City transaction took an extraordinary degree of commitment, creativity, and persistence on the part of the owner, as well as housing agencies at all levels of government and many dedicated, elected and appointed officials in New York and Washington,” said Todd Trehubenko, Recap Real Estate Advisors president, who personally led the effort and was assisted by Philip Silva and Shannon Lestan.
Starrett City Associates (SCA), the owner of the property, retained Recap Real Estate Advisors two years ago after attempts to sell the property were blocked by the government due to concerns about the potential loss of affordable housing. Recap Real Estate Advisors led owner negotiations with the government to establish a framework for maintaining StarrettCity as affordable housing, while also permitting the owners to realize their equity. Originally pursued as a sale, the transaction was converted to a refinancing following the collapse of the credit markets in the fourth quarter of 2008. New federal and state legislation was enacted to secure the landmark agreement to recapitalize and preserve the property.
“The range of services and depth of expertise that Recap Real Estate Advisors offered us were truly impressive. Negotiating on our behalf, designing this innovative transaction, securing approvals and consents from our limited partners and four government agencies – all of this was accomplished at the highest level of performance that we could ever had hoped for,” said Robert Poll, president of SCA. “We look forward to continuing our relationship with Recap Real Estate Advisors and taking advantage of other services they offer.”
In addition to transaction and advisory services, Recap Real Estate Advisors also specializes in asset management and green capital needs assessments for multifamily properties.
Starrett City was developed under a Large Scale Residential Development on a site originally consisting of 140 acres. The property includes 46 high-rise residential apartment buildings, 8 parking garages, its own power plant, schools and other community facilities, a commercial shopping center, and extensive undeveloped land. As part of the agreement with government, the shopping center and excess development land were removed from regulation and will be owned by an entity affiliated with the owner. The apartment property, which also includes the power plant, parking garages, community center and sports club, will remain subject to the Division of Housing and Community Renewal (DHCR) and HUD supervision for the next 30 years.
During 2009, Recap Real Estate Advisors has recapitalized over $1 billion of existing multifamily property, structuring and arranging $650 million of debt in the most difficult credit market in decades.
“Starrett City exemplifies the complex transactions we’ve been arranging for two decades now,” stated David Smith, CEO of Recap Real Estate Advisors. “That said, this was an incredibly complicated situation that many thought would be impossible to turn into a ‘win-win’. All of our experience, the critical contributions from many others, and the political support for continued affordability combined to make this an outstanding success.”
About Recap Real Estate Advisors
Recap Real Estate Advisors is a Boston-based financial services company that provides solutions to complex multifamily asset problems. It is the financial services and asset management group of CAS Partners. Over the company’s history, Recap Real Estate Advisors has completed transactions on more than 780 properties nationwide, with aggregate property value of more than $3.5 billion. It currently manages nearly $4 billion in multifamily assets. Through its wholly owned subsidiary On-Site Insight, it has performed more than 6,000 capital needs assessments. Visit www.recapadvisors.com.
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