Dealmaker: Wells Fargo Multifamily Capital Originates $188M for New York Co-Op

Wells Fargo Multifamily Capital, McLean, Va. closed a $187.5 million FHA loan to refinance Penn South Houses, a large Manhattan affordable housing community.

The 35-year HUD/FHA-insured loan is backed by the 2,820-unit Penn South co-op apartments. Wells Fargo Multifamily Capital Managing Director Thomas Schissler originated the loan.

Penn South is a limited-equity cooperative apartment complex. The residents hold shares in the co-op association that owns the property, Mutual Redevelopment Houses, but the resale value of their shares is limited by a formula designed to keep unit prices affordable. Schissler said this refinance ensures and extends Penn South’s affordability through 2053.

The New York Commercial Observer reported the new loan replaces a $134 million mortgage that the New York City Housing Development Corp. placed on the property in 2011 and a $45 million second mortgage NYCHDC provided in 2014. The housing development agency assigned both loans to Wells Fargo.

The International Ladies’ Garment Workers Union built Penn South in 1962 to provide affordable housing for its union members.

Penn South’s 10 residential buildings occupy six square blocks in Manhattan’s Chelsea neighborhood. The 20-acre property is organized under New York’s Redevelopment Companies Law and supervised by New York City’s Department of Housing Preservation and Development. It provides affordable housing for low- and moderate-income New Yorkers, including senior citizens on fixed incomes.