Two New York City pension funds see opportunity to invest in new housing.
Pension systems for public school teachers and city workers will partner with developer Hudson Companies in a joint venture to build middle-income housing in the city and neighboring suburbs, Bloomberg News reported. The funds will invest $ 250 million, most of which will be used to create new units. About 30 percent will be used to renovate existing units.
The pensions will provide equity for up to 10 projects with a total of 2,000 units. The joint venture is already investigating two sites, one in Brooklyn and the other in Westchester County.
For rental apartments, the partners plan to develop, manage and monetize the properties for 10 years before selling them. In New York City, projects will likely have around 30 percent of units designated as affordable to medium tenants. The rest will be at market rate.
Manhattan rents have fallen sharply over the past year, making renting more affordable. But it also weakened the interest of developers in building new projects.
But Hudson manager Joe Riggs sees an opportunity. “It is always a good time to build new housing, especially affordable housing,” he told the publication. “We see an opportunity to acquire development sites on a reasonable basis for the first time in a long time.”
Hudson previously worked with New York City’s five pension funds in 2013, investing $ 500 million in areas affected by Super Storm Sandy, according to the publication.
[Bloomberg] – Keith Larsen