US. New York City Pensions to Fund $250 Million Apartment Venture
For New York City’s pension funds, there’s no time like now to invest in new apartments.
The two largest retirement systems — covering public school teachers and municipal employees — are teaming up with developer Hudson Cos., to allocate $250 million for construction of middle-income housing in the city and surrounding suburbs, the developer said.
The pensions will commit $243.75 million of that equity, which will be leveraged to build as many as 10 projects or 2,000 units, said Joe Riggs, principal at Hudson. The partnership has so far identified two possible sites, one in Brooklyn and the other in Westchester County.
“It’s always the right time to build new housing — especially housing that’s affordable,” Riggs said. “We see an opportunity to acquire development sites on a reasonable basis for the first time in a long time.”
New York City’s famously high rents have plunged during the pandemic as workers stay remote and find little reason to pay a premium to live near the office. The price declines are making urban housing more accessible to tenants of lesser means, but they’ve also damped developers’ enthusiasm for planning new market-rate projects now. That’s created an opening for those who seek to build affordable units, according to Riggs.
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