The Michaels Organization is one of the nation’s busiest developers and, by far, the largest private owner of affordable housing in the nation with upwards of 42,000 units.
The Marlton, N.J.-based company is now in the crowded low-income housing tax credit (LIHTC) syndication business with new affiliate Riverside Capital.
It’s not the first time for Michaels to syndicate credits. An earlier company, Prestige Affordable Housing Equity Partners was a syndicator, largely matching Michaels Development Co. deals with investors, but Riverside has bigger plans.
“We’ve built out a full syndication platform, so we have all the functionality of a syndicator” says Sebastian Corradino, Riverside president.
Michaels Development Co. projects will be a primary source of deals for the new company, but Riverside is also working with other developers. The firm closed about $141 million in LIHTC capital and acquired 19 projects last year, about two-thirds the deals involved Michaels’ projects and one-third were deals with other developers.
Riverside plans to increase its business this year, with again approximately two-thirds of the business coming from Michaels’ deals, estimates Corradino, who notes that the firm will be gradually increasing the volume coming from other developers.
The firm is planning one, possibly two, multi-investor funds this year after focusing on single-investor proprietary funds in the past.
The syndication business is highly competitive with firms chasing a limited number of LIHTC deals, but Corradino, who previously held leadership positions at RBC Capital Markets—Tax Credit Equity Group and Apollo Housing Capital, believes Riverside can carve out its place. With Michaels Development projects at its core, the company has a pipeline of deals, many of them large developments that are appealing to investors. Riverside will work nationally, but its main geographic focus will be on the West Coast, Chicago, and the Mid-Atlantic, areas where Michaels has built relationships over the years.