The AHF 50 Owners hold a combined 634,622 affordable housing units in 6,711 developments across the nation.
If you estimate that two people live in each home, that’s nearly 1.3 million people who are housed by just these 50 firms. That’s roughly the entire population of Maine or everyone in the city of Dallas. Texas-sized, indeed.
The number of units owned reflects a 2.3% increase over last year’s list of top owners; the number of developments owned, however, is down a tick, less than 1%.
The Michaels Organization remains the nation’s largest owner of affordable housing, with 42,539 units in 364 developments. The Marlton, N.J.–based firm delivered more than 1,000 affordable units last year and started development activity in Atlanta for the first time.
Michaels is followed on the Top 50 Owners list by Plymouth, Minn.–based Dominium, with 27,989 affordable homes in 208 developments. Dominium developed and acquired nearly 5,000 units last year and expanded its new-construction pipeline into three new states. The firm is working toward reaching 40,000 units by 2025.
The Millennia Cos. of Cleveland jumps up a spot, to No. 3, with nearly 23,000 affordable units. The company reported adding more than 4,000 units to its portfolio in 2017.
Denver-based Mercy Housing, the largest nonprofit owner, comes in at No. 4, with 22,635 units in 327 properties across the country. Two more nonprofit organizations are in the Top 10 as well—Alexandria, Va.–based Volunteers of America, at No. 5, and Columbus, Ohio–based National Church Residences, at No. 6.
The rankings are based on the number of affordable housing units owned as of Jan. 1. Only general-partner owners are eligible. Nearly 100 firms completed affordable housing finance’s survey to be considered for the annual list.
In addition to being able to house an entire state, the AHF 50 Owners employ a small army: Together, the companies have a workforce of nearly 40,000 people.
In 2017, the industry saw several large acquisitions. Boston-based Beacon Communities (No. 9) acquired National Development Corp., a general partner in 59 assets, the majority of which are affordable housing developments. Beacon acquired the company, not just the portfolio.
Owners
Enterprise Homes (No. 49) grew by more than 4,100 affordable housing units with the acquisition last year of The Shelter Group’s portfolio. In another deal, Jonathan Rose Cos. (No. 10) purchased Forest City Realty Trust’s affordable housing business, including 48 communities with nearly 8,500 units in seven states. In the deal, valued at more than $500 million, Jonathan Rose also acquired Forest City’s Federal Housing Administration loan-origination and -servicing personnel to form Rose Community Capital. Avanath Capital Management (No. 47), too, continued to grow its affordable assets last year, acquiring more than 600 units. The firm projects it will acquire about 1,400 units this year.
The recent transactions don’t necessarily foreshadow a wave of more large portfolio deals in the future, says Daryl J. Carter, chairman and CEO of Avanath.
“The bigger trend is that more capital is flowing into the affordable and workforce housing space,” he says. “That’s what I see. Whenever you have more capital, it gives you the ability to do larger deals.”
Carter’s company recently closed two funds totaling about $388 million in equity commitments. Avanath’s investment strategy consists of acquiring and preserving affordable housing assets in supply-constrained markets with high barriers to entry.
“We continue to stick to the basics and fundamentals of where we acquire properties and where there is very strong demand,” Carter says. “We’ve been very aggressive in Sacramento, Calif., and Orlando, Fla.”
Avanath has properties in Sacramento that are near an Apple campus. And Orlando continues to be a big job producer in not only the hospitality industry but also aerospace, according to Carter.
The industry veteran adds that the focus on affordable and workforce housing has grown in the past three to four years. “One reason it’s changed is because it touches so many people,” says Carter. “ … The affordability challenges have touched so many [lives] nationally.”
