Blackstone Real Estate Income Trust (BREIT) has taken over interests in a massive affordable housing portfolio from American International Group (AIG).
Officials recently closed on the previously announced $5.1 billion sale involving approximately 80,000 units across more than 650 assets nationwide. Advising AIG on the transaction was CBRE Capital Advisors, the investment banking arm of CBRE, in partnership with CBRE’s affordable housing team.
“Blackstone has a long history as a responsible owner of affordable rental housing, including through the preservation of 5,000 units of rent-restricted housing at StuyTown in New York City,” said Blackstone officials. “At StuyTown, we have invested over $260 million to improve the property, and residents are twice as satisfied with their living experience under our ownership.”
In the United Kingdom, the firm’s portfolio company, Sage Housing, is one of the fastest-growing providers of affordable housing in England.
The company was attracted to the AIG assets “due to the quality and locations of these primarily suburban, garden-style communities, as well as the stable cash flows they generate,” officials told Affordable Housing Finance. “The properties in the portfolio provide critical affordable housing; on average their rent restrictions have 17 years of remaining terms, and we intend to find ways to extend the affordability of these communities for the long term.”
Blackstone representatives said they do not intend to amend the low-income housing tax credit restrictions on the properties and instead plan to find ways to extend affordability programs when they expire.
The portfolio is diversified across 42 states, including California, Texas, and Washington, D.C. and the Northern Virginia area, and in cities such as Austin, Texas; Dallas; Denver; Los Angeles; Phoenix; Seattle; and the San Francisco Bay Area.
In July, AIG (NYSE:AIG) and Blackstone (NYSE:BX) announced an agreement for Blackstone to acquire a 9.9% stake in AIG’s life and retirement business for $2.2 billion in a cash transaction. Separately, AIG and BREIT, a long-term perpetual capital vehicle affiliated with Blackstone, also announced an agreement on the affordable housing properties.
Earlier this year, BREIT also announced a deal to acquire Home Partners of America, a Chicago-based firm that owns and operates single-family rental properties, valuing the company at $6 billion.