The Partnership is Led by The Community Preservation Corporation, a Nonprofit Company with 50-Year History of Financing Affordable Housing, with Related Fund Management and Neighborhood Restore HDFC
FDIC Decision to Select Partnership Helps Preserve Long-Term Affordability and Stability of the Portfolio
New York, NY, December 15, 2023 – A partnership led by The Community Preservation Corporation (CPC), with Neighborhood Restore HDFC, and Related Fund Management (RFM) as partners today announced it has closed on two joint venture transactions acquiring a five percent equity interest in two newly formed entities with the Federal Deposit Insurance Corporation (FDIC) retaining a 95 percent equity interest. CPC will service the $5.8 billion in loans held by the ventures which consist of a portion of Signature Bank’s loan portfolio secured by rent stabilized and/or rent controlled multifamily housing in New York City.
The FDIC selected the partnership’s bid on six pools out of the Signature Bank loan portfolio and closed on the transaction today. The mission-driven team will work to ensure the preservation of long-term affordability for properties securing the loans in the venture. Their application was supported by a broad cross section of New York City and State elected and public officials, as well as dozens of local and national nonprofit organizations.
“CPC is proud to work with our partners at Related Fund Management and Neighborhood Restore HDFC to bring long-term financial stability to these properties,” said Rafael E. Cestero, Chief Executive Officer of the Community Preservation Corporation. “As a nonprofit housing finance company with five decades of work in New York City, CPC understands the unique role that rent regulated housing plays in our neighborhoods, the distinct financial challenges facing its owners and operators in today’s market, and its importance as a haven of affordability to its tenants. We are committed to a mission of preserving the long-term affordability as well as the physical and financial stability of these properties. We look forward to working with our borrowers and community partners to accomplish this mission.”
The ventures include 868 permanent loans, secured by properties containing nearly 35,000 units – 80 percent of which are characterized as rent regulated. CPC will be responsible for servicing the loans. Building ownership and management of the associated properties will remain the same.
“We are proud to be collaborating with CPC and Related Fund Management, in partnership with the FDIC, on the Signature bank portfolio of rent regulated assets in New York City,” said Salvatore D’Avola, Executive Director of Neighborhood Restore HDFC. “Neighborhood Restore is committed to the stabilization of this housing and seeks to achieve positive outcomes for the tenants, owners and the surrounding communities. We are prepared to commence this initiative with 25 years of experience providing stewardship to at-risk and distressed properties in neighborhoods throughout New York City.”
“Related Fund Management is proud to support CPC and Neighborhood Restore with a strategic equity investment in this venture. Our collective expertise, track-record, and mission to preserve affordable housing will help secure the future of these buildings,” said Justin Metz, Managing Principal, Related Fund Management.
“From historic investments in public housing to record-breaking creation of affordable and supportive housing, our administration has been unwavering in its efforts to provide safe, affordable homes for New Yorkers,” said New York City Mayor Eric Adams. “It is that commitment that guided our support of The Community Preservation Corporation and Neighborhood Restore, two organizations with decades-long track records of partnering with the city to provide and protect much-needed affordable housing for New Yorkers and that will be faithful stewards of this critical portfolio. And make no mistake: New York tenants in 30,000 affordable homes can breathe a sigh of relief today. We applaud the FDIC for safeguarding these valuable resources and overseeing a fair process with the right priorities.”
“The Community Preservation Corporation has been a crucial decades-long leader in preserving and establishing affordable housing throughout New York State. The collapse of Signature Bank earlier this year disrupted the market and threatened to erode trust in the banking industry. New York acted swiftly in response, and today’s partnership is the next step in ensuring residents have a stable loan provider. I am confident that with CPC at the helm, New Yorkers can count on a team that has demonstrated a commitment to serving in the best interest of our communities,” said New York City Comptroller Brad Lander.
“Signature Bank’s collapse created significant uncertainty around how the buildings in their loan portfolios would be affected, but more importantly how the collapse would affect the residents and the communities where they are located. In the midst of a decades-long affordability crisis, it is critical to ensure that this portfolio of stabilized housing is being serviced by a team that understands our city and is committed to preserving these buildings that are home to tens of thousands of New Yorkers. This partnership led by the Community Preservation Corporation has a decades-long track record of creating and preserving affordable housing throughout the five boroughs, and I am confident that they are the right choice to bring stability to this loan portfolio,” said New York City Public Advocate Jumaane D. Williams.
“As the highest-ranking New Yorker on the House Financial Services Committee, increasing and preserving affordable housing has been one of my top priorities for more than thirty years,” said Congresswoman Nydia M. Velázquez. “I’m pleased by the FDIC’s decision to select the Community Preservation Corporation to service Signature Bank’s rent-stabilized loan portfolio. CPC has an extensive track record of working to ensure the preservation of affordable housing and their stewardship of this loan portfolio will help ensure that many working-class families in New York City are not displaced.”
Senator Brian Kavanagh, chair of the New York State Senate Committee on Housing, Construction and Community Development said, “It’s very good news that the FDIC continues to move expeditiously to address the consequences of the Signature Bank failure and has selected the application of this partnership led by the Community Preservation Corporation (CPC), to service these loans, which I was happy to support. The partnership of CPC, Related Fund Management, and Neighborhood Restore leverages decades of deep expertise in multifamily, rent regulated, and affordable housing finance and preservation, and I am confident that they will service this portfolio in a way that supports responsible property owners and promotes stability, affordability, and quality housing for New York’s rent stabilized tenants now and into the future.”
“At a time when housing costs are skyrocketing and tenants are being priced out of their own neighborhoods, it is encouraging to see Community Stabilization Partners selected to take over a portion of Signature Bank’s residential real estate loan portfolio,” said Assemblymember Linda B. Rosenthal, Chair of the Assembly Committee on Housing. “Together, these organizations have decades of experience in financing affordable housing projects and ensuring the preservation of thousands of units across New York City, including many rent regulated properties. The need to preserve and build new affordable housing has never been greater, and I look forward to Community Stabilization Partners’ work and collaboration with communities across the City.”
New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas said, “We applaud the FDIC’s decision to partner with the Community Preservation Corporation, Neighborhood Restore, and Related Fund Management in acquiring the rent-stabilized housing loan portfolio formerly controlled by Signature Bank. There is no doubt that this partnership will stabilize the finances and improve the condition of these buildings, putting the best interest of tens of thousands of tenants at the forefront of their efforts. Our thanks to CPC, Neighborhood Restore and Related Fund Management for their ongoing commitment to creating and preserving affordable housing at a time when New Yorkers need it most.”
“Providing safe, stable and affordable homes requires partnership and dedication to preservation–especially rent regulated homes, which serve as a critical part of our housing stock. We appreciate FDIC’s collaboration to structure a transaction that gives properties the best shot at staying and becoming stable. Behind every affordable housing financial transaction is a New Yorker who can live comfortably in this great city. The experienced and preservation-focused team of CPC, Neighborhood Restore and Related Fund Management ensures the best path to success for these assets,” said HPD Commissioner Adolfo Carrión Jr.
“This transaction will safeguard affordability for tens of thousands of New Yorkers residing in rent regulated housing” said HDC President Eric Enderlin. “Thanks to everyone involved in this collaborative partnership of mission-driven and non-profit organizations for their commitment to ensuring the long-term financial stability of this portfolio.”
The partnership, which will operate collectively as Community Stabilization Partners (CSP) has decades of experience in the financing, management, and loan servicing of affordable and rent controlled multifamily housing.
CPC, which is leading the partnership, is a nonprofit multifamily finance company founded in New York City in 1974 to provide financial and technical resources to stabilize underserved communities. Since then, CPC has invested over $14 billion to finance the creation and preservation of more than 225,000 units of workforce and affordable housing, and is an equity investor in the ownership of 4,200 units of affordable housing. CPC has a loan servicing portfolio of $3.78 billion consisting of more than 1,700 loans of primarily affordable and rent regulated properties.
Related Fund Management is a strategic investor in the partnership. Founded in 2009, RFM has established itself over more than a decade as a highly skilled and differentiated real estate investment manager. With approximately $12 billion of assets under management, RFM and its affiliates have a long history in affordable housing preservation.
Neighborhood Restore HDFC, which will serve as a strategic asset manager, has a history together with its affiliated not-for-profit entities of overseeing affordable housing development and preservation programs in New York City that seek to foster neighborhood stabilization by efficiently transitioning properties from physical and financial distress to responsible third-party ownership. Since its formation in 1999, Neighborhood Restore has successfully preserved over 12,000 units of affordable housing in over 1,900 buildings throughout New York City.
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About The Community Preservation Corporation (CPC)
CPC is a nonprofit multifamily finance company that was founded in 1974 to provide financial resources to stabilize and revitalize underserved communities. Today, CPC uses its unique expertise in housing finance and public policy to expand access to affordable housing and drive down the costs of housing production, advance diversity and equity within the development industry, and address the effects of climate change in our communities through the financing of sustainable housing. Since its founding, CPC has invested over $14 billion to finance the creation and preservation of more than 225,000 units of housing and has approximately 4,200 affordable units under ownership. CPC is a carbon neutral company and has been rated AA- by S&P. Visit CPC at communityp.com, and on Facebook, Twitter and LinkedIn
About Neighborhood Restore HDFC
Neighborhood Restore Housing Development Fund Corporation (“Neighborhood Restore”) and its affiliate not-for-profit entities collaborate with city, state and federal housing agencies on programs that seek to foster neighborhood stabilization by efficiently transitioning properties from physical and financial abandonment to responsible third-party ownership. Since its formation in 1999, Neighborhood Restore has successfully implemented affordable housing development and preservation programs throughout New York City while maintaining strong relationships with government, lenders, and community partners. Over time, it has emerged as an incubator for housing development programs focused on transforming distressed properties into affordable community assets.
About Related Fund Management
Related Fund Management (RFM) is a strategic investor in the partnership. Founded in 2009, RFM has established itself over more than a decade as a highly skilled and differentiated real estate investment manager. With approximately $12 billion of assets under management, RFM and its affiliates have a long history in affordable housing preservation.