GE CAPITAL TO BUY 26 APARTMENT COMPLEXES FROM THE RESOLUTION TRUST CORPORATION
GE CAPITAL TO BUY 26 APARTMENT COMPLEXES FROM
THE RESOLUTION TRUST CORPORATION
STAMFORD, Conn., Nov. 25 /PRNewswire/ -- GE Capital said today it has completed arrangements to buy 26 apartment complexes comprising 5,589 dwelling units from the Resolution Trust Corporation for $75 million in cash. The company also expects to close on one additional complex next week.
In June, GE Capital won the right to purchase these properties by submitting the highest bid in a RTC auction earlier this year. The auction initially attracted more than 300 interested buyers.
The complexes, 20 of which are in Texas and the remainder in five other states, were bought under the RTC's Affordable Housing Program. The program was mandated by Congress to assure that a portion of the housing units sold by the RTC in the savings and loan bailout will be set aside for low- and very-low-income buyers.
"We are pleased that GE Capital has been able to make a major commitment of its capital and management expertise in confronting two problems that are plaguing our nation -- the hangover from the collapse of the thrift industry and the critical need for affordable housing," said John Deterding, senior vice president of GE Capital Commercial Real Estate.
In accordance with guidelines set by the U.S. Congress, 10 of the 26 apartment complexes, with 1,956 dwelling units, will be designated as "affordable housing." GE Capital, with its financial strength, management expertise and experience intends to own these buildings and spend several million to improve all of the buildings.
GE Capital has begun initial discussions with the Texas Department of Housing and Community Affairs, Housing Finance Agency and has been working with several non-profit organizations, in an attempt to clearly identify the appropriate groups, who can add value to GE Capital's management of the affordable housing units while they are owned by GE Capital and who may be appropriate buyers over the longer term. The buyers will be qualified organizations that specialize in providing housing to low-income or disabled residents.
Eight of the designated projects are in the greater Dallas area and two are in Houston. By law, designated units can only be occupied by low- or very-low-income residents and must maintain their designation for 40 to 50 years, even if they are resold.
"Now that we have closed the transaction, we will begin working cooperatively with state and local governments and national and local groups representing low-income persons and persons with disabilities in getting the designated properties under the appropriate management," Deterding said. "We hope to create partnerships with many such organizations. Their expertise and knowledge of local needs and conditions is vital to the success of this effort.
"The $75 million in cash that we are paying for these properties will help relieve the government's S&L burden, thereby reducing the amount of funds that will ultimately have to be raised from taxpayers or siphoned away from needed social programs," Deterding noted.
Of the 16 non-designated properties, four are in Houston, four in San Antonio, two in Austin and the remaining six in Arizona, Colorado, Tennessee, Oklahoma and Kansas.
GE Capital, headquartered in Stamford, is one of the nation's largest diversified financial services companies with assets in excess of $77.4 billion.
/CONTACT: Lisa Berger of GE Capital, 203-357-4346/ CO: General Electric Capital Corporation ST: Connecticut IN: FIN SU: TNM CK-FC -- NY052 -- 6917 11/25/91 14:18 EST