Standard Communities has acquired a 100% affordable housing portfolio of more than 6,000 homes in four states.
With this transaction valued at more than $1 billion, Standard enters three states—Arizona, Colorado, and Texas—while significantly growing its California holdings to nearly 11,000 apartment homes.
The acquisition is the largest affordable housing transaction of the year, according to officials.
“In a market environment considered challenging, Standard is experienced and well positioned to finance and complete large and highly complex multi-state acquisitions relying on the skills, creativity, and knowledge of our team,” said Jeffrey Jaeger, co-founder and principal at Standard Communities. “Our strategic planning in this difficult interest rate environment has allowed us to enter into new states, greatly expand our portfolio, and continue to invest in people’s futures by offering them affordable places to live."
Home to over 13,000 residents, the more than 60 communities in the acquired portfolio serve a mix of families and seniors. The properties, on average, were built in 2002, with the majority developed by the seller. Sources familiar with the deal said Highridge Costa Cos. is the seller.
Standard officials said they led public-private partnerships with multiple government agencies, including the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, state governments in Arizona, California, Colorado and Texas, and several local housing authorities, to preserve long-term affordability through the various federal, state, and local programs in place across the projects, including low-income housing tax credits.
“Our unique acquisition underscores the complexity and scale that our team managed in a challenging environment in both the debt and equity capital markets,” said Chris Cruz, senior managing director, essential housing, at Standard Communities.
The firm took control of the properties by acquiring general and limited partnership interests, including controlling interests of managed tax credit funds with institutional investors. It also included the purchase of various third-party subordinate notes to optimize partnership economics.
“We navigated new financing facilities, tax credit investor partners, nonprofit partners, ground lease buyouts, and loan assumptions with numerous governmental and private lenders simultaneously on a fixed timeline,” Cruz said. “This required our highly coordinated efforts, deep expertise, and focus on our mission to create more vibrant, sustainable, and affordable communities.”
The company plans to invest over $30 million in capital improvements and deferred maintenance across the portfolio with no residents being displaced to ensure the communities remain affordable and resilient for years to come, according to officials.
Based in New York and Los Angeles, Standard has a portfolio of nearly 27,000 apartment units and more than $5 billion in assets under management across 21 states and Washington, D.C. It ranked No. 15 on Affordable Housing Finance’s list of top affordable housing owners this year.
