Nonprofit BRIDGE Housing has raised $71.5 million in a bond offering to finance the construction of a 224-unit affordable housing community in Portland, Oregon.
The bond offering, which was four times oversubscribed, was underwritten and marketed by KeyBanc Capital Markets. According to the firms, this marks the first time a nonprofit housing provider has issued publicly offered tax-exempt bonds for the construction of a new development. Historically, this type of bond offering has been used by rated government entities, such as housing authorities.
BRIDGE Housing, a leading West Coast affordable housing nonprofit owner and developer, has been a capital markets trailblazer with an AA- credit rating from S&P Global Ratings. It has forged relationships with Wall Street investors and was the first nonprofit housing provider to issue general obligation sustainability bonds with a $100 million raise in 2020.
This creative financing caps the nonprofit’s year, where it grew its affordable housing portfolio by 11.5% to 14,774 units through development and acquisitions. It now has $4 billion in assets in California, Oregon, and Washington.
“We are constantly seeking innovative financing to spur sustainable growth and advance our urgent mission to provide affordable housing,” said BRIDGE Housing president and CEO Ken Lombard. “We are grateful to KeyBank for leading this pathbreaking bond sale, to our investors, and to our partners on this very important project.”
The bond proceeds lowered BRIDGE Housing’s borrowing costs to a fixed rate approximately 1 percentage point lower than the federal Secured Overnight Financing Rate, saving the Portland transit-oriented development, hollywoodHUB, $2.5 million. In addition to the bond issue underwriting, KeyBank Community Development Lending and Investment is providing nearly $62 million in low-income housing tax credit equity as well as permanent financing with an $18.5 million private placement loan.
“As one of the nation’s leading affordable housing capital providers, KeyBank is delighted to support BRIDGE Housing by facilitating access to novel funding for hollywoodHUB,” said Sam Adams, managing director of KeyBanc Capital Markets Public Finance. “The strong demand for construction bonds—from some of the biggest institutional investors—attests to the credibility BRIDGE Housing has earned from decades of financial stewardship and delivering on its mission to strengthen communities.”
BRIDGE Housing is developing hollywoodHUB in collaboration with the Portland Housing Bureau and Tri-County Metropolitan Transportation District of Oregon (TriMet). With the land owned by TriMet, the 12-story tower will be built on the site of the Hollywood Transit Center, a hub served by three light-rail lines and three bus lines. It also is located in a high-demand neighborhood with access to retail, grocery stores, schools, and health care facilities.
Two-thirds of the units at hollywoodHUB will be affordable for households earning up to 60% of the area median income (AMI), while the remainder will be for households earning up to 30% of the AMI.
