Red Mortgage Capital LLC, the proprietary debt banking arm of comprehensive capital provider Red Capital Group LLC (RED), announced the closing of a $52.5 million financing deal with Dalcor Holdings LLC for Vista on Gessner, an 805-unit multifamily development in Houston.
The transaction includes a first lien $50 million Fannie Mae M.TEB (MBS as Tax-Exempt Bond collateral) and a simultaneously executed second lien $2.5 million co-terminus taxable tail. This is RED’s third transaction with Dalcor.
“Vista on Gessner exemplifies Dalcor’s continued commitment to creating, preserving and improving affordable housing in the markets that it serves,” said Tracy Peters, Senior Managing Director of Affordable Housing at RED. “The Fannie Mae M.TEB financing structure made it viable for Dalcor to acquire and renovate Vista on Gessner, along with several other properties in the past couple of years, resulting in the preservation of this important housing stock. It has been a great partnership with Dalcor, Fannie Mae and Red Capital Group that has resulted in more than 1,500 affordable housing units preserved and renovated in Texas. We really appreciate the professionalism and partnership of the Dalcor team.”
Originally built in 1977, Vista on Gessner is comprised of two- and three-story buildings. The property includes a leasing office and clubhouse, three swimming pool areas, on-site laundry facilities and a library. The acquisition and renovation will convert the property into 805 units of upgraded affordable housing with 100 percent of the units affordable to 60 percent of the Area Median Income. Preserving and improving this housing is particularly crucial to the area in the wake of Hurricane Harvey, which hit Texas in August of last year and caused significant damage to the area’s economy and housing stock.
“With more than 800 apartments, Vista on Gessner has been a significant focal point of affordable housing in Houston,” said Dale Dodson, CEO of Dalcor Companies. “Our acquisition and planned renovations will not only preserve this crucial affordable housing, but will provide significant upgrades that will improve its quality and curb appeal. We want to thank our partners at the Texas Department of Housing and Community Affairs, Affordable Housing Partners, Fannie Mae, Red Capital and others for making this happen. Once again, this financing team executed and delivered a very competitive financing package.”
All apartments will be updated with new windows, sliding glass doors, cabinets and countertops, appliances, HVAC systems, plumbing and electrical fixtures. Exterior and common area improvements will include new roofs, stairs and railings, parking lot and walkway repairs, gazebo and swimming pool repairs, and cosmetic repairs and additional upgrades. The renovation includes the addition of a fitness center, business center and library, and will include 42 accessible units and 19 units accommodating hearing impairment.
RED is a Fannie Mae DUS® lender, Freddie Mac SBL Seller Servicer and the No. 1 producer of FHA-insured mortgages by loan count of total closings in HUD FY15, FY16 and FY17.