Preservation of Affordable Housing (POAH) recently acquired 20 properties with over 1,000 affordable apartments in Ohio and Kentucky from The Model Group (TMG), a for-profit development company with deep roots in Cincinnati.
TMG donated the properties and sold Brookstone Properties, its property management business, to the longtime nonprofit organization. Deal terms were not disclosed.
The unique transaction marks Boston-based POAH’s largest portfolio acquisition to date and its entry into Ohio and Kentucky.
POAH was invited to Cincinnati by TMG, which was looking for a nonprofit partner that could further enhance the properties for their residents.
Bobby Maly, COO of TMG, said his company had a portfolio of family housing and had a very good property management company, but it was looking for a way to provide enhanced services for its residents. That led to POAH, an organization experienced in integrated property management and services.
The two companies soon found that they were aligned in mission, said Julie Creamer, senior vice president, acquisitions, at POAH.
The properties are all low-income housing tax credit developments, ranging in age from about year one to year 15 in their compliance periods.. The developments, which still carry some debt, will be remain affordable to residents.
“We have some benefits to how we can structure the transaction, the refinancing, and bringing services to the properties in a way that really only a nonprofit can,” Creamer said.
In neighborhoods like Over-the-Rhine, Walnut Hills, and Evanston, where rents have climbed dramatically and much of the affordable housing is at risk of conversion to market-rate apartments or condos, POAH and TMG is preserving affordability and expanding opportunities for low-income residents in Cincinnati.
In addition, POAH Communities is providing third-party management for more than 600 affordable apartments and will partner with TMG to preserve and build affordable housing properties going forward.
TMG will continue to be active in affordable housing, Maly said.
POAH Communities will implement a Community Impact program across the portfolio to help residents succeed, with outcome-driven resident services that foster financial stability, health, and education.