Nuveen announced that it has secured a $250 million commitment from the TIAA General Account to seed the Nuveen Real Estate U.S. Impact Housing Fund.
The “core-plus, open-end fund” is focused on generating strong risk-adjusted returns and creating housing opportunities for low-income residents across the U.S., primarily by investing in a geographically diverse portfolio of properties. This includes housing with rent subsidies, rent restrictions, income restrictions, and naturally occurring affordable housing assets, according to the company.
In addition, the fund also intends to invest in projects and financing that support minority and women developers of affordable housing.
"As demand for affordable housing has intensified nationwide, more investors are seeking opportunities in this resilient housing sector that produces positive societal benefits and steady returns—both of which are also aligned to TIAA's objectives," said Pamela West, portfolio manager of impact investing at Nuveen Real Estate. "As a key component of healthy, sustainable communities, affordable housing also enhances economic activity and job creation."
The new fund will aim to address the preservation of housing for residents earning no more than 80% of the area median income (AMI), with a large concentration of households earning less than 60% of the AMI.
The U.S. Impact Housing Fund will also seek to improve the quality of that housing through expenditures to help with environmental adaptability and enhance resident well-being through investment in resident services, like health care and education. All investments are expected to make a material step toward achieving important social and environmental outcomes in affordable housing in alignment with select UN Sustainable Development Goals.
Nuveen, the $1.1 trillion asset manager of TIAA, has extensive experience investing in affordable housing dating back to 1992. It has dedicated portfolio management support for its affordable assets and works with local communities to preserve and develop more affordable housing.
"We are one of the few truly vertically integrated fund managers that can build, invest in, and operate quality, safe affordable housing across the country," said Nadir Settles, global head of impact investing at Nuveen Real Estate. "By consistently reinvesting in our properties, we not only help our residents but also build quality assets, which helps sustain investment value."