BRP, Fairstead, Urbane sign $23.3M ground lease, get $635.6M loan to rehab NYCHA units

BRP Companies, Fairstead, and Urbane through the entity NYC Pact Preservation Partners LLC as tenant signed a ground lease valued at $23.3 million with the New York City Housing Authority as landlord for 87 buildings with nearly 1,700 units including the 230-unit residential elevator building (D9) at 710 East New York Avenue in East Flatbush, Brooklyn, 48-unit residential walkup building (C1) at 619 Howard Avenue in Brownsville, Brooklyn, and 60-unit residential elevator building (D1) at 955 Rutland Road in East Flatbush, Brooklyn. The total loan amount was $635.6 million from several lenders.
NYCHA announced this deal in March 2022. “Today, the New York City Housing Authority (NYCHA) formally announced the selection of BRP Companies, Urbane, and Fairstead as the PACT partners… Collectively, the developments comprise 1,700 apartments with 87 buildings that are home to more than 3,600 residents.”
According to a NYCHA release, equity capital is provided by “Vistria Housing Fund, an impact fund focused on the preservation, improvement, and production of affordable and workforce housing across the United States.”
The deal closed on November 28, 2023 and was recorded on December 14, 2023.

The loan signatories for BRP Companies, Fairstead, and Urbane were Jeffrey Goldberg and Geoffroi Flournoy. The signatory for Merchants Capital and NYC Housing Development Corporation was Brian Cheigh and Bianca Geary. The financing includes $348 million from Merchants Capital Bank, which was then assigned to Fannie Mae; $249.5 million from the NYC Housing Development Fund Corporation as a building loan; and $34 million as a purchase money mortgage. There are 87 buildings with 1696 units. The total in city records adds up to $631.5 million, while the published amount was $635.6 million.
The ground lease signatory for New York City Housing Authority was Jonathan Gouveia. The signatory for BRP Companies, Fairstead, and Urbane was Jeffrey Goldberg and Geoffroi Flournoy.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer BRP Companies had purchased any other properties and sold two properties in one transaction for a total of $9 million over the past 24 months.
The seller New York City Housing Authority purchased nine properties in one transaction for a total of $137.6 million and sold or leased 33 properties in six transactions for a total of $196.3 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Richard Barnhart, head officer and Herminio Torre, officer. The business entities are C&C Apartment Management Llc and Hope Gardens Llc.

The buyer

The PincusCo database currently indicates that Fairstead owned at least 102 commercial properties with 5,301 residential units in New York City with 4,891,896 square feet and a city-determined market value of $607.1 million. (Market value is typically about 50% of actual value.) The portfolio has $529.1 million in debt, with top three lenders as NewPoint Real Estate Capital, Greystone & Co., and Capital One respectively. Within the portfolio, the bulk, or 92 percent of the 4,891,896 square feet of built space are elevator properties, with walkup properties next occupying 7 percent of the space. The bulk, or 48 percent of the built space, is in Manhattan, with Bronx next at 36 percent of the space.
The PincusCo database currently indicates that BRP Companies owned at least 35 commercial properties with 684 residential units in New York City with 661,621 square feet and a city-determined market value of $55.7 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 67 percent of the 661,621 square feet of built space are walkup properties, with elevator properties next occupying 33 percent of the space. The bulk, or 78 percent of the built space, is in Brooklyn, with Queens next at 22 percent of the space.

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