A joint venture involving The Michaels Organization, the Urban Investment Group (UIG) within Goldman Sachs Asset Management, and the Community Development Trust (CDT) has acquired 90 affordable housing developments in a $1.2 billion deal.
The acquired portfolio consists of communities developed and rehabilitated primarily with federal low-income housing tax credits, most of which are near or at the end of their required affordable initial compliance period. The acquisition of these communities ensures the long-term reinvestment and preservation of more than 10,000 apartment homes affordable to families and seniors with low and moderate incomes.
"We are proud to be part of this joint venture designed to preserve these essential housing resources, ensuring they remain community assets for generations to come," said John J. O'Donnell, CEO of The Michaels Organization.
The properties were all acquired from Harmony Housing and managed by Greystone Property Management Corp. They stretch across eight states—Florida, Illinois, Indiana, Kentucky, New York, South Carolina, Texas, and Wisconsin.
The team was working on the deal since early 2022 and assumed Fannie Mae long-term fixed-rate financing. All 90 communities acquired by the Essential Housing Impact Partnership will be managed by Michaels, the largest affordable housing owner in the nation.
In a separate deal, Michaels will also serve as the property manager for 31 communities in North Carolina that were acquired by nonprofit Foresight from Harmony Housing. This transaction adds 1,923 affordable apartments to Foresight’s portfolio.
Based in Douglasville, Georgia, Harmony Housing has been operating for more than 20 years, purchasing more than 12,000 units. The nonprofit is supported by Greystone personnel and grew out of Greystone founder Stephen Rosenberg’s desire to give back to people who are less fortunate, according to the organization’s website.
"The Michaels Organization and Foresight are clearly aligned with both Harmony Housing and Greystone's mission to positively impact people's lives through the support of affordable housing. We are confident Michaels will continue the resident care and attention that's been a priority for Harmony Housing and GPMC," said Bob Barolak, president of Harmony Housing in a statement. "Harmony Housing will continue its strategy of growing and preserving a portfolio of high-quality affordable housing that can give back to the community, and we are proud of the immense impact we have made through resident services, resident and employee scholarships, and charitable donations that have been a result of the Harmony Housing portfolio strategy."
As part of these acquisitions, both on-site and corporate employees of Greystone Property Management were invited to join Michaels, said the partnership.
The Harmony Housing acquisition was led by Cristhian Codorniu, vice president of capital markets at Michaels; Kunal Chothani, vice president of acquisitions at Michaels; Alan Sage, vice president at Goldman Sachs; and CDT chief business development officer Michael Lear.
"By partnering with like-minded organizations in Michaels and UIG, we were able to assemble the critical resources needed to complete this major preservation transaction. Through this partnership, these properties will remain viable affordable communities—providing over 30,000 residents with quality affordable housing—for the long term," said Joseph F. Reilly, president and CEO of CDT, which provides long-term capital to support the preservation of affordable housing and other community developments with social impact throughout the United States
UIG has been a pioneer in creating innovative capital solutions to address complex community challenges. Since its inception in 2001, it has focused on revitalizing underserved neighborhoods and has helped finance the creation and preservation of over 53,000 housing units, 3 million square feet of community facility space, and over 12 million square feet of office, retail, and industrial space.
“Goldman Sachs has invested over $17 billion to create positive social and financial returns, and the acquisition of this portfolio exemplifies our team’s mission-driven approach to investing. The preservation of high-quality, affordable housing has never been more important than it is today, and the acquisition of this portfolio allows us to do just that—and to do it at scale, with a real focus on promoting positive outcomes for the residents in these communities," said Dan Alger, a managing director and co-head of UIG.