Security Properties Executes LIHTC Resyndication of Heatherstone Apartments in Kennewick, WA

SEATTLE, Jan. 15, 2019 /PRNewswire/ -- On November 21, 2018, Security Properties closed on a 4% Low-Income Housing Tax Credits (LIHTCs) recapitalization of Heatherstone, a 455-unit affordable multifamily property in Kennewick, WA for $41,600,000. The LIHTC financing will be used to fund extensive renovations at the property. Construction is set to commence in mid-December.

Heatherstone is a garden-style community comprised of units that are income restricted to residents making less than 50% and 60% of Area Median Income. The property was originally developed in three phases between 1994 & 1996 utilizing LIHTCs from the Washington State Housing Finance Commission (WSHFC). Security Properties initially acquired Heatherstone in January 2016 with bridge financing in order to set the property up for a 4% LIHTC execution. At the time of the initial acquisition, Security Properties also forward rate locked for 30 months on a Freddie TEL originated by JLL Capital Markets. This mechanism allowed JLL to underwrite the permanent TEL financing at an interest rate that was applicable at the beginning of 2016, saving Security Properties roughly 90bps on its permanent interest rate and millions in loan sizing.

Security Properties is excited about the planned renovation of Heatherstone that will not only bring about a much needed face-lift to the property and the neighborhood, but will preserve the asset as affordable housing for the long-term. Despite a national presence in the affordable housing industry, Heatherstone is Security Properties' first LIHTC execution in its home state of Washington; a fact that the company is also very excited about. "This investment solidifies our presence in the Tri-Cities for the foreseeable future, provides funding for renovations that will greatly enhance the quality of life of our residents, and allows us to preserve much needed affordable housing in this community for the next 30 years." states Bryon Gongaware, Managing Director of the Affordable Housing Group for Security Properties.

JLL Capital Markets provided a 17-year term fixed-rate tax-exempt loan on the property. "We are always excited to play a role in a transaction that preserves and greatly improves the quality of affordable housing. In this instance, JLL was able to combine several different Freddie Mac products into a single financing solution which had a tremendous positive impact on the viability of this development. A property of this size and scale will serve the residents of the local market for decades to come and will likely be transformative leading to future reinvestment in the immediate area and we are proud to have been a part of this successful transaction," notes Tim Leonhard, Managing Director of JLL Capital Markets. PNC Bank syndicated the LIHTC equity for the project.

The property will be managed by Security Properties Residential, an affiliate of Security Properties.

About Security Properties

Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com

About Security Properties Residential

Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets.  Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.

News media contact:

Ed McGovern, 202.628.8019
[email protected]

SOURCE Security Properties