New York City Acquisition Fund
The New York City Acquisition Fund (the Fund) is an industry-leading fund that leverages private, public and foundation capital to provide below-market rate loans for property acquisition to overcome the shortage of property available for the development of affordable housing in New York City.
It provides flexible, advantageous capital to affordable housing developers to acquire property. The City of New York, major foundations, and members of the banking industry established the fund in 2006, over an initial ten year term. As a structured fund, the Fund brings together capital with different risk and return requirements.
In this case, public and philanthropic investment dollars are used to create a guarantee fund to provide security for the banks which provide the loan capital. For each dollar that the government has invested in the fund, an additional $7 has been raised from other investors.
For-profit developers are eligible for loans up to 95% loan to value ratio while non-profit developers are eligible for increases to 130% loan to value ratioThe maximum loan amount is $20 million for the acquisition of existing occupied buildings and $10 million for the acquisition of vacant land although the Fund has the flexibility to provide exceptions to these limits. Inclusive of extensions, the maximum loan term is three years.
Forsyth Street is the contracted Fund Manager responsible for all Fund operations including portfolio management, investments and fiscal operations. Forsyth Street is an advisory and asset management firm, focusing on affordable housing, real estate and municipal and impact investment. Forsyth Street was founded in 2003 and has a team of 17 professionals, and have executed over $3.5 billion in transaction volume on behalf of clients.
Housing & Local Amenity.
This fund aims for social impact, specifically to provide affordable housing in NYC for individuals and families who otherwise couldn’t afford to live in NYC’s five boroughs.
Originating lenders: Corporation for Supportive Housing, Enterprise Community Loan Fund, Low Income Investment Fund, Local Initiatives Support Corporation
Senior lenders: Bank of America, Capital One, Citibank, Deutsche Bank, HSBC, JPMorgan Chase, M & T Bank, Morgan Stanley, Signature Bank, Wells Fargo Bank
Foundations: Enterprise Community Partners, Inc., Ford Foundation, Heron Foundation, MacArthur Foundation, Robin Hood Foundation, Rockefeller Foundation, Starr Foundation
City of New York: NYC Department of Housing Preservation and Development, NYC Housing Development Corporation
- Ocean Towers Project: On May 16, 2013, The Fund successfully financed the acquisition of an occupied 360-unit property located in Coney Island. Through this acquisition, Proto Property Services and Community Development Trust will reinstate affordable rents for all 360 units by leveraging public subsidies to carry upgrades to heating and electrical systems, full elevator replacement and other building improvements.
- On January 30, 2008, the Fund successfully financed the Atlantic Development Group’s acquisition of a parcel located at 80-88 Bruckner Boulevard in the Port Morris neighbourhood of the Bronx. Through this acquisition, Atlantic was able to develop 428 units of low income rental housing with 22,940 square feet of ground-floor commercial.
- On January 15, 2014, the Fund successfully financed the acquisition of two vacant sites. Through this acquisition, Common Ground will construct 418 units across two buildings, including a live-in superintendent’s unit.
Management compensation is not structured as a percentage of commitments but rather is a fixed and variable structure that is volume dependent. This can range from between 0.25% to 0.5% on investments.
Senior Capital: 3 year investment period with 3 year maximum term for 7 year commitment.
No liquidity: Opportunity to recommit every 3 years
Foundation & City capital: 10 year commitment. No liquidity.
The Fund has provided approximately $300 million of capital, resulting in the preservation or creation of over 7,700 units of housing.