Partners plan a conversion at $100m Bronx complex.

An Apollo-led joint venture partnership has paid $100 million for two Bronx housing complexes they plan to convert to coops.

Apollo Real Estate Advisors and Housing and Services, Inc. (HSI), a non-profit housing developer, with Ramius Capital Group and Morgan Stanley Mortgage Capital, Inc., have acquired Lafayette Morrison and Lafayette Boynton Housing Corporations, a complex of eight, 19-story apartment buildings with 1,865 residential units in the Soundview section of the Bronx.

Working in conjunction with state and local officials, the partners plan to convert the properties to affordable coops for existing tenants.

Located southeast of the intersection of the Bruckner Expressway and the Bronx River Parkway and over looking Soundview Park, the properties collectively contain 1.4 million square feet of residential space.

The acquisition culminates 15 years of tenant commitment to maintain the 1,865 units, which include one-, two- and three-bedroom apartments, some with terraces, as quality affordable housing.

Apollo joined HSI, which was engaged by tenants to assist in acquiring the properties with the goal of converting them to affordable cooperatives for the existing tenant base, consisting primarily of working families with incomes between $30,000 and $60,000 per year.

In financing the acquisition, Apollo partnered with Ramius Capital Group, which co-invested equity, and Morgan Stanley Mortgage Capital, Inc., which provided debt.

Bronx Borough President Adolfo Carrion, Jr. led thetelected officials of the Bronx, including New Yolk State Senator Reuben Diaz and New York State Assemblyman Reuben Diaz, Jr., as well as New York City Council Members Annabel Palma and Carmen Arroyo, in supporting the project. The New York State Division of Housing and Community Renewal (DHCR) worked closely with the tenant groups and purchasing team to complete the transaction.

"The innovative structure of this deal, which is designed to provide affordable housing to New Yorkers, is a first, as it is 100% privately financed, involving no direct public funds," said James Simmons, Apollo partner.

"Apollo's involvement in this project is part of our ongoing strategy to focus investment on the affordable and middle-income housing market in New York, which we believe is underserved.

Apollo is actively seeking all types of creative residential opportunities in New York and is planning on investing more than $1 billion in all property types in the New York metropolitan region over the next three years."

Said Claire Haaga, president of Housing and Services, Inc.," This was a long and complicated negotiation that has ended with the best possible result for the 1,865 families in these apartment buildings--they will get to keep their homes at an affordable price and build their future financial stability at the same time."