Wells Fargo & Company (NYSE: WFC) and Related Companies today announced the acquisition of Parkway Gardens, a 694-unit affordable housing apartment property in the Southside of Chicago. The development will be preserved as affordable housing for an additional 30 years. Related Companies has also committed to $40 million in physical, mechanical and structural upgrades. Related Companies, which acquired the property through its affordable housing preservation division, Related Affordable, will own and manage the property and is committed to maintain it as affordable housing for 30 years.
Well Fargo & Company has made a $36.5 million equity investment for the purchase and renovation. The Wells Fargo investment consisted of a $26.6 million direct Low Income Housing Tax Credit equity investment and a $9.9 million direct Federal Historic Credit investment. The transaction also received $59.5 million bonds from the Illinois Housing Development Authority under the New Issue Bond Program to facilitate the rehabilitation of the property and the preservation of affordable housing.
Fannie Mae, via Oak Grove Capital, provided credit enhancements for the loan. “We are excited to participate in the preservation of Parkway Gardens,” said Korbin Heiss, SVP of Wells Fargo Community Lending and Investment. “This large investment will preserve needed affordable housing in the Southside of Chicago in addition to creating construction jobs associated with the project’s comprehensive renovation.”
Parkway Gardens, located on the Southside of Chicago, consists of 35 buildings on a 13-acre parcel. It was built in the mid-1950’s as co-ops and converted to rentals in the mid-1970’s under the HUD Section 236 IRP program. In 1988 it was purchased from HUD by private investors. Related Companies will substantially renovate the buildings including the mechanical systems, site improvements and in-unit upgrades. Additional amenity spaces will also be created for the residents. Renovations are expected to amount to over $57,000 in upgrades per unit. Related Midwest, Related Companies’ Chicago office, will oversee the renovations.
“Related has a 40-year commitment to the creation and preservation of affordable housing and we are thrilled to have been able to partner with Wells Fargo, Fannie Mae, and Oak Grove Capital to acquire nearly 700 units of critical housing stock in Chicago at Parkway Gardens and preserve the affordability for decades to come,” said Mark Carbone, President of Related Affordable. “Affordable housing is critical to the growth and stability of our nation’s cities and necessary for the continued success of the American economy. Related will continue to look for ways to create and preserve affordable housing opportunities and ensure residents of all income levels have access to a quality place to live and raise their families.” ###