Boston Financial Investment Management has entered into an agreement to acquire Boston Capital’s low-income housing tax credit (LIHTC) fund portfolio, announced ORIX Corp., the parent company of Boston Financial.
The major move would give Boston Financial a top position in the low-income housing tax credit (LIHTC) asset management industry and position it for further investments, according to the company. The transaction is subject to customary closing conditions and approvals.
In 2016, ORIX Corp. USA acquired Boston Financial, a longtime LIHTC syndicator that manages a $7.7 billion portfolio comprising over 1,125 properties and 98,110 units.
The purchase of Boston Capital’s housing credit assets will nearly double the portfolio to $15 billion. Officials said the move will lead to an increase in associated revenue, and the additional assets under management will be served by Boston Financial’s best-in-class infrastructure.
Founded in 1974 by Jack Manning and Herb Collins, Boston Capital is one of the nation's oldest and largest LIHTC syndicators. Since the inception of the LIHTC program in 1986, Boston Capital has raised more than $10.5 billion of investor equity for more than 3,500 properties nationwide.
Once the transaction is complete, Boston Capital would no longer be in the housing credit equity business, according to an official.
The acquisition of such a large portfolio likely means that a number of Boston Capital personnel will transition to Boston Financial. In addition, Boston Capital will bring new industry relationships to the company.
The firm’s entities Boston Capital Finance, which provides debt financing options, and Boston Capital Real Estate Partners, which is involved in market-rate multifamily rental housing, are not part of the deal, according to David Gasson, vice president and director of communications at Boston Capital.
ORIX has been making big moves in the affordable housing industry. In recent years, it has also acquired the finance firms RED Capital Group, Lancaster Pollard, and, most recently, Hunt Real Estate Capital in 2019. The Hunt deal did not involve Hunt Capital Partners, another tax credit syndication company.
ORIX Corp. USA was founded in 1981 and is part of Tokyo-based ORIX, a publicly owned financial services company that’s listed on the Tokyo Stock Exchange and the New York Stock Exchange.