$700m of Affordable/Workforce Multifamily Investment Over 14 Years in Business, $64m Completed in Past Year During COVID-19 Pandemic
July 6, 2021 – New York – In its recently completed internal community impact assessment, Pembrook Capital Management LLC (“Pembrook”), a real estate investment management company focused on affordable housing investments, confirmed significant impact from investing approximately $700 million into affordable/workforce multifamily rental housing, equating to over 12,000 units housing an estimated 31,000 tenants, 70% of which were located in predominantly minority neighborhoods. The assessment was conducted to identify past successful efforts and identify areas for further improvement.
Based on these results and the firm’s ability to make such investments on a competitive, non-concessionary basis over the past 14 years, Pembrook is renewing its commitment to the sector with an eye toward increasing its investment impact even further in the future. Stuart Boesky, CEO of Pembrook, made the announcement.
“Pembrook has always allocated a majority of its capital to what we believe to be socially responsible, community related investments, and we also believe it is important to self-assess and reflect upon the actual impact we are making,” Mr. Boesky said. “We believe that our investments in development, rehabilitation, and preservation of affordable housing have made a difference for more than 30,000 low to middle income tenants around the country. Measuring impact with precision is difficult, but it’s important for individual companies and the industry as a whole to make the effort. Among other things, self-evaluation tells us what we’re doing right and how we can do more.”
Pembrook gives credit to its institutional supporters for recognizing that affordable housing can be a safe and sound investment that may earn attractive risk adjusted returns, and at the same time positively impact the communities in which they do business. As noted by Neal Landerer, Director at Sterling National Bank, Pembrook is a valued customer of our bank and they have given us the unique opportunity to help them grow and at the same time directly benefit the communities in which we maintain branches.”
The following are among the civic-minded companies that collaborate with Pembrook to make a difference:[1]
· BofA Securities
· Banc of California
· BMO Harris Bank
· Charles Schwab Bank
· CIBC
· Citi
· Fifth Third Bank
· Luther Burbank Savings
· Mariner
· Pacific Premier Bank
· Pacific Western Bank
· PNC
· Sterling National Bank
Below is a snapshot of Pembrook’s internal review of social impact through investments since Mr. Boesky launched the firm in 2006:
Multifamily Housing Produced or Preserved:
Ø Total dollars Invested: $770,000,000
Ø Affordable/Workforce MF Rental Housing $700,000,000
Ø Number of Units: >12,000
Ø Tenants served: ~31,000
Ø Predominantly minority neighborhoods: 70%
Ø Units primarily targeted to municipal employees >2000
Green buildings: 800,000 square feet
Not-for-profit owned multifamily buildings: 200,000 square feet
Not-for-profit owned commercial buildings: 180,000 square feet
Pembrook’s affordable multifamily investments over the past year include the following:
Golden Bee: $15 million first mortgage loan to recapitalize a portfolio comprised of four affordable multifamily assets with 65 units and 51,426 square feet in total, within the Los Angeles market. The sponsor plans to pay off the existing debt on the properties and complete an exterior and interior rehabilitation of the complex and apartment units. Of the 65 units in the portfolio, 28 are leased to Section 8 tenants and the remaining are leased to tenants at rents that are less than the 80% of the local AMI.
Staten Island: $12.4 million loan for the acquisition and rehabilitation of 100 Belmont Place and 101 Daniel Low Terrace, two adjacent rent-stabilized apartment buildings in Staten Island comprised of 112 apartment units. The buildings will be converted to long-term rent regulated properties via NYC’s “Article XI” Tax Incentive Program and is designed to encourage new construction or rehabilitation of affordable housing. The property will be subject to a 40-year Regulatory Agreement mandating its affordability at 55%-100% of Area Median Income (AMI).
Bonita Glen: $11.7 million mezzanine loan to finance the development of Bonita Glen, a 170-unit, 5.3-acre middle market and workforce housing multifamily community located at 245 Bonita Glen Drive in Chula Vista, CA. The Chula Vista submarket provides an affordable alternative for renters priced out of the more expensive downtown and coastal regions of San Diego. A rent covenant provides that at least 51% of the units will be leased to tenants making less than 100% of the Area Median Income.
AZ Multifamily: $7.5 million first mortgage loan for the acquisition of Northern Palms and Augusta Cove, two adjoining multifamily properties located at 2835 West Northern Avenue and 2820-2844 W. Augusta Ave. in Phoenix, AZ. Funding from Pembrook enabled the sponsor to acquire the assets and upgrade units. In addition, the sponsor plans to maintain at least 51% of the units for both properties at affordable rents which are equal to, or less than 30% of 80% of the local AMI and preserving housing for the area’s lower income residents.
Shaker Heights: $17.8 million loan for the acquisition and renovation of a value-add multifamily portfolio comprised of six buildings and 275 units in Shaker Heights, Ohio. In order to maintain affordability for its members, rents at the properties are restricted to no more than 30% of 80% of the Average Median Income within the metro area.
“Since our founding in 2006, Pembrook has been active in the affordable housing finance space, and we have always been aware of economic and racial inequality affecting both owners and end users of the buildings we finance, and the neighborhoods where they are located,” Mr. Boesky said. “Today we renew our focus on social impact and will continue to seek out and close investments that deliver it.”
Pembrook is a real estate investment manager that provides financing throughout the capital structure. The firm has originated or participated in investments totaling over $1.45 billion since it began investing in 2007.
About Pembrook Capital Management, LLC
Founded in 2006 by Stuart J. Boesky, Pembrook Capital Management invests in a variety of commercial real estate with a core emphasis on impact investing and affordable housing across the country. This firm’s strategy involves commercial real estate debt, including first mortgages, mezzanine, bridge loans, note financings, and preferred equity. Please visit http://www.pembrookgroup.com.
[1]Although these companies have approved the use of their name in this release such approval does not necessarily represent an endorsement of the Sponsor’s performance.
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