The First-of-Its-Kind Public-Private Partnership Will Invest Over $21 Million to Create Long-Term Affordable Housing in One of the Fastest Growing Areas of Austin
AUSTIN, TX -- (Marketwired) -- Sep 30, 2015 -- The Community Development Trust (CDT), a real estate investment trust (REIT) that provides capital for the creation and preservation of affordable housing, announced today a partnership with the Austin Affordable Housing Corporation (AAHC), a nonprofit subsidiary of the Housing Authority of the City of Austin (HACA), to acquire two market-rate properties, The Bridge at Center Ridge and The Bridge at Tech Ridge, totaling 642 units in Austin, Texas.
CDT and AAHC will convert half of the units in each property into long-term affordable housing. The unique public-private partnership, between a private, mission-oriented REIT and a public housing authority, creates high-quality affordable units in a rapidly growing area of Austin, and without the use of the Low-Income Housing Tax Credit (LIHTC) program.
Located in North Central Austin, The Bridge at Center Ridge, with 348 units, and The Bridge at Tech Ridge, with 294 units, were built in 2007-2008 as unregulated market-rate properties with amenities including large resort-style pools, 24-hour fitness centers, and Wi-Fi throughout the common areas. Under CDT-AAHC ownership, half of the units across both properties will be converted into long-term affordable housing and reserved for households earning less than 80 percent of the Area Median Income.
In recent years, the North Central Austin housing market has seen significant population and employment growth and is projected to experience continued rent increases and low vacancy over the next several years. Without any affordability requirements, many market-rate rental units will likely become unaffordable as rents continue to increase. Through its long-term partnership with CDT, AAHC was able to stem the tide of rising rents in this community and preserve these high-quality units as affordable.
"We are excited to work with the Austin Affordable Housing Corporation to create newly affordable high-quality housing in a high-growth city like Austin," said Joseph F. Reilly, President and CEO of CDT. "We believe that this model can be implemented in other states and cities and we look forward to continuing to partner with state and local housing agencies to create and preserve affordable housing nationwide. Because of CDT's depth of experience in affordable housing and our access to long-term capital, we were able work closely with our partner and close on this acquisition in less than two months."
In addition to the $21.4 million in equity from CDT and AAHC, Bellwether Enterprise originated two new 10-year Freddie Mac mortgages to finance the acquisition. HACA will own the land and lease it to the CDT-AAHC partnership on a long-term basis.
"We are proud to have partnered with the outstanding team at CDT to bring greater affordable housing opportunity to North Austin," said Michael Gerber, President and CEO of HACA. "These exceptional properties will immediately help address the 55,000 unit shortfall we have in affordable housing in our city. And, we look forward to showcasing these properties as a model of what can be achieved when working with an experienced real estate investment firm committed to the creation and preservation of affordable housing."
CDT is committed to investing in the creation and preservation of new affordable housing and working with partners like AAHC that share their mission of improving residents' lives and neighborhoods for the long-term. As a CDFI and private REIT with a social impact mission, CDT utilizes creative financial solutions to provide debt and equity capital to underserved real estate markets while seeking attractive returns for shareholders.
The Community Development Trust (CDT) is a national lender and investor in affordable housing. Working with local, regional, and national partners, CDT makes long-term equity investments and originates and acquires long-term mortgages. In its sixteen years, CDT has invested over $1.1 billion in debt and equity capital to properties in 42 states and regions -- helping to preserve and create nearly 37,000 units of affordable housing. CDT is a private real estate investment trust (REIT), a certified Community Development Financial Institution, an approved Fannie Mae affordable housing lender, and a member of the Federal Home Loan Bank of New York .
The Austin Affordable Housing Corporation (AAHC) is a nonprofit subsidiary of the Housing Authority of the City of Austin (HACA), that ensures and preserves quality, affordable housing opportunities and pursues entrepreneurial endeavors. AAHC oversees HACA's homeownership program, residential and commercial real estate, the Six-Star Resident Program and emerging enterprises.
CONTACTS: Zigis Switzer 212.784.5705 [email protected] Beth Phillips 512.767.7725 [email protected]
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