.... And the local media heralds the historic financing.

Properties on the city's list of the 200 most distressed multifamily residential buildings will get $7.5 million in financing from Morgan Stanley.

By Amanda Fung

Four physically rundown, financially overleveraged multifamily buildings in the Bronx recently received an injection of much-needed capital courtesy of their new owner, Workforce Housing Advisors Inc.

The buildings, located at 2239, 2241, 2323 and 2333 Creston Avenue, have accumulated numerous building code violations and liens. Morgan Stanley has agreed to provide $7.5 million in interim financing to help start the rehabilitation of the properties. The money will be used to pay down the $750,000 in back property taxes, municipal liens and emergency repair expenditures that the previous owners amassed over the years, according to John Crotty, founding partner of Workforce Housing Advisors.

"The loan allows us to take the first step in turning these buildings around and fixing them," said Mr. Crotty, adding that his firm first bought the note on the buildings, which have a total of 120 units, and foreclosed on them in order to take over the properties earlier this year.

All four of the properties are in the city Department of Housing and Preservation and Development's Alternative Enforcement Program, which targets the 200 most distressed multifamily residential properties in the city. Additionally, the previous owner of 2239 Creston Ave. and 2323 Creston Ave. was on the city public advocate's worst landlords list. Combined, both buildings have more than 1,000 violations, according to the watch list's website, which currently indicates that work is now being done at the buildings.

"We see this as a unique opportunity to improve the living conditions of families and individuals in need of sound, affordable housing in the Bronx," said Audrey Choi, head of global sustainable finance at Morgan Stanley, in a press statement.

Additionally, the city Department of Housing Preservation and Development expects to provide financing, in the form of low-interest loan, low-income housing tax credits and other conventional loans, to pay for the actual rehabilitation of the buildings and to ensure that the units there remain affordable. Mr. Crotty said the firm is still working out the total cost to fix the buildings, but noted that the rehab could cost roughly $100,000 a unit.

"Some units are in worse condition than others," Mr. Crotty added. "We don't know at this point how long the rehab work will take but we want it to be as painless for residents as possible."

Workforce Housing Advisors bought the four Bronx buildings in partnership with NYC Partnership Housing Development Fund Company Inc., a non-profit housing development fund company. Founded in 2009, Workforce Housing Advisors currently owns 527 units in the city, mostly in the Bronx. The firm focuses on repositioning distressed multifamily properties and preserving affordability.

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