Pequot Highlands

Project Overview

250 Units
12 First Street
Salem, MA

Financing Type:

4% LIHTC TAX EXEMPT BONDS

Investor:

Boston Financial

Year of Acquisition:

2016

Deal Type:

MassHousing

Description:

Before SSDC’s acquisition, Pequot Highlands, containing as it did 100 Section 236 affordable units, had been a vital resource for the community of Salem, MA for over four decades. As a flagship property of Winn Companies it boasted amenities including playgrounds, gazebos, a basketball court, a computer center, and views of both the ocean and the Boston skyline, but in recent years it had been beset by architectural issues due to the deterioration of the brick façade of the two high-rise towers which together constitute the complete residential offerings of the property. Seeing an opportunity to preserve an important asset while extending affordability to the community, Silver Street, traditionally adept at navigating the complex financing and government regulatory issues inherent in uniquely challenging acquisitions, was able to structure the deal with the following general terms, ensuring maximum value for the seller while expanding and extending affordability and committing substantial funds to a robust rehabilitation of the property:

 

  •          $65M committed in total development costs
  •          $20M committed to rehabilitation costs
  •          125 units (50%) subsidized via Project-Based Section 8 on a 15-year contract
  •          75 units (30%) subsidized via the Tax Credit Program on a 30-year contract
  •          Financing secured through Tax Exempt Bonds issued by Mass Housing

 

This marked expansion of affordability at Pequot Highlands was the direct result of the flexibility and cooperation of Mass Housing, who were able to secure Tax Exempt Bonds for the project despite the persisting country-wide shortage of available funds throughout 2016. Mass Housing recognized Pequot’s status as a critical asset in need of large-scale rehabilitation and had faith in Silver Street’s ability to both complete the acquisition and see through to fruition the rehabilitation process. 

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