Related Companies, one of the largest owners of affordable housing in the United States, today announced that the company is in the process of acquiring 17 properties totaling 3,062 affordable housing units across the Midwest. Through a public-private partnership with the City of Chicago and Illinois Housing Development Authority (IHDA), affordability of the units will be preserved for an additional 30 years and more than $262 million will be invested in the rehabilitation of the properties.
The portfolio acquisition by Related Companies’ divisions Related Affordable and Related Midwest comprises more than 1,500 units in the City of Chicago, including the 628-unit Marshall Field Garden Apartments. The community was due to lose its affordable designation in 2017, but has been extended three more decades as a result of Related’s acquisition.
Related also announced the purchase of Metroplex Inc., an affordable property management company based in Illinois with 36 multifamily property developments across four states. In addition to these portfolio acquisitions, over the past 24 months Related has acquired 3,196 units and expects to close on an additional 1,027 affordable units later this year.
“Related has preserved more than 35,000 affordable housing units, and we have never converted a single unit to market rate,” said Matthew K. Finkle, president of Related Affordable. “Through public-private partnerships like this, we will be able to significantly improve the lives of the residents who call these communities home, and ensure that thousands of residences in the City of Chicago and the Midwest will remain accessible to the families and individuals who need them most. We look forward to continuing to work with the local and state governments to expand our preservation efforts.”
“I’m pleased that Related has made this commitment to Chicago and that our working families will continue to be able to afford to live here,” said Mayor Rahm Emanuel. “The investment will not only help to accelerate the development of additional housing options, especially in growing neighborhoods across the City of Chicago, but it will bring us closer to our goal to create, improve and preserve more than 41,000 units of housing in the city by 2018.”
“We are thrilled to partner with the City of Chicago and Illinois Housing Development Authority to preserve and enhance over 1,500 affordable residences in Chicago and we applaud Mayor Emanuel’s commitment to providing quality housing opportunities that are accessible to all,” said Curt Bailey, president of Related Midwest, the Chicago office of Related Companies. “While Related is perhaps most widely known for its luxury residential developments, our company was founded more than four decades ago with the goal of developing new and retaining existing affordable housing. Today’s announcement demonstrates our pledge to expand housing options across all income levels.”
“The residences at Marshall Field Garden Apartments provide much needed quality affordable housing to working Chicagoans and are an important part of this city,” said 27th Ward Alderman Walter Burnett, Jr., whose ward includes the property. “Related has demonstrated a long-term commitment to preserving affordable housing across the country and I support their efforts to preserve and rehabilitate Marshall Field Garden Apartments in the 27th Ward. Through this public-private partnership, the property will undergo an extensive rehabilitation program that will improve the quality of life for its hundreds of residents and ensure its viability for many years to come.”
Drawing on its extensive experience in the affording housing sector, including the award-winning $100 million renovation of Parkway Gardens, a 694-unit affordable rental community on Chicago’s South Side, Related will lead a multi-year effort that will update all seven buildings located within Chicago, as well as an additional 605 units throughout Illinois, 404 units in Florida, 248 units in Iowa and 280 units in Minnesota.
One of the first communities to be redeveloped is the 628-unit Marshall Field Garden Apartments complex spanning two blocks in Chicago’s Old Town neighborhood. Upgrades are scheduled to begin in July 2015. The $175 million project is being financed by IHDA and includes both low-income and historic preservation tax credits. Extensive renovations planned for the individual units and common areas include the construction of a new fitness center, laundry room and enhanced community room, as well as the addition of after-school programming and other services available to residents.
The property received $102 million in conduit bond financing from IHDA, which also allocated the Low-Income Housing Tax Credits that were purchased by Wells Fargo. Fannie Mae provided credit enhancements for the bonds via Wells Fargo as DUS lender.
“The preservation of Marshall Field Gardens by Related Affordable will ensure housing opportunity in the Near North Side community for decades,” said Antonio R. Riley, Midwest regional administrator for the U.S. Department of Housing and Urban Development (HUD). “Marshall Field Gardens will be maintained as high-quality, affordable housing for many longtime residents in this community of opportunity. Residents will continue to benefit from access to excellent transportation and jobs, in addition to training and employment opportunities that will empower residents and serve as a catalyst for change.”
“The State of Illinois has emphasized the importance of quality, affordable housing in neighborhoods with good schools, better public services and access to transportation,” IHDA Executive Director Mary R. Kenney said. “IHDA’s investment in Marshall Field Gardens provides a tremendous boost to the Old Town neighborhood, preserving much-needed affordable housing for working families in the heart of Chicago. This was the result of a strong public-private partnership working toward a common goal to make Illinois a more prosperous state, creating opportunities that ensure everyone has the chance to succeed.”
“We are committed to supporting affordable multifamily housing in every market, every day,” said Jeffery Hayward, executive vice president and head of multifamily, Fannie Mae. “We were pleased to bring our experienced affordable housing team together to work with Related to provide financing that will preserve and rehab these properties and ultimately lead to higher quality affordable housing. This important transaction will result in great outcomes for families and tenants in the area.”
“Wells Fargo shares Related’s staunch commitment to supporting diverse housing opportunities and preserving our critical affordable housing stock,” said Alan Wiener, managing director of Wells Fargo Multifamily Capital. “This acquisition represents one of the largest public-private affordable preservation transactions in decades and we are pleased to partner with Related, the City of Chicago and IHDA to renovate and maintain over 3,000 units of housing as affordable for years to come.”
“I am very pleased about the investment and upgrades Related plans for Marshall Field Garden Apartments,” said Joyce Wiggins, a 48-year resident of Marshall Field Garden Apartments and resident representative. “Marshall Field is a very special place, a real Chicago neighborhood and community, and the new plans for enhanced amenities and services will create an even better quality of life for all of the families that call the buildings home. The fact that Marshall Field will remain affordable housing for at least another 30 years is wonderful and ensures that this great community of residents, including those of us who live on a fixed income, can continue to live in and enjoy Old Town and its convenient access to shopping, parks and transportation.”
The acquisition of Metroplex, Inc. will add to Related Management’s team of nearly 2,000 employees who manage the day-to-day operations of Related’s more than 45,000 apartments across the country. Metroplex currently has 200 employees and manages a portfolio of 36 multifamily property developments consisting of 4,749 units in four states: Florida, Iowa, Illinois and Minnesota.
“We are thrilled to welcome the Metroplex team into the Related Management family,” said Jeffrey I. Brodsky, president of Related Management. “It is a pleasure to blend organizations with similar values and a shared commitment to delivering best-in-class services to residents, owners and our communities.”
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Related Companies is the most prominent privately-owned real estate firm in the United States. Formed 40 years ago, Related is a fully-integrated, highly diversified industry leader with experience in virtually every aspect of development, acquisitions, management, finance, marketing and sales. Headquartered in New York City, Related has offices and major developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Abu Dhabi, London, São Paulo and Shanghai, and an existing portfolio of real estate assets, valued at over $20 billion, made up of best-in-class mixed-use, residential, retail, office, trade show and affordable properties. In Chicago, Related Midwest is the preeminent Chicago developer of luxury condominium and rental homes, affordable housing and unique mixed-use properties and is recognized for its innovative, market-defining developments. Related Affordable is the division of Related Companies that develops, acquires and preserves affordable housing throughout the nation. To date, Related has developed or acquired 45,000 affordable and workforce housing units. For more information about Related, please visit www.related.com.