The expected sale of a 5,881 unit affordable housing complex in Brooklyn, N.Y., that could have brought hundreds of millions of dollars of bonds to the market has collapsed, according to a representative for the seller.
“The seller’s taken it off the market,” said Todd Trehubenko, president of Recap Advisors LLC, which represents Starrett City Associates. Given the size and complexity of the deal along with the credit crunch and faltering housing market, it “just proved to not be the right time to sell,” he said.
The owners could seek to refinance the housing complex through the New York State Housing Finance Agency to preserve affordability for tenants, but Trehubenko said it was premature to suggest refinancing was on the table. He did say, however, that the sellers were looking at their options and would be talking to the HFA. Agency spokesman Philip Lentz said the owners had not approached them about refinancing the complex but that it would be a taxable deal if they went that route.
A New York Times article last week suggested the owners could refinance to the tune of $500 million but Trehubenko said he didn’t know where that figure came from.
Although neither the sellers nor the Cogsville Group, a private equity firm that was chosen as the finalist to bid on the complex, publicly stated the prices under negotiation, the Times cited anonymous sources that put the buyer’s offer at about $700 million.
“The seller was clear with the buyer that because of market conditions they just didn’t see they were going to be able to agree to terms,” Trehubenko said. “If the market hadn’t turned I think we would have completed the transaction last year.”
The HFA had been expected to provide bond financing for a buyer structured as a nonprofit entity.
The owners had sought to sell the 140-acre complex in 2007 for $1.3 billion but that deal was blocked by state and federal officials who questioned whether affordability could be maintained on the units at that price.