One of the nation’s most significant commercial real estate investment firms is entering the affordable housing marketplace for the first time.
BH Properties, the national real estate firm with a 10 million-square-foot portfolio across 16 states, announced Thursday it has launched a new investment plan of building a $1 billion portfolio of affordable housing assets.
The firm concurrently announced it hired William Stoll, a longtime affordable housing executive, to lead the initiative as managing director. Stoll has completed more than $6 billion in real estate transactions over the course of a 14-year career, according to BH Properties.
“Our goal is to build scale relatively quickly,” said Andy Van Tuyle, senior managing director of investments, in a statement. “The addition of Bill, his contacts, reputation and experience will help expedite this effort.”
BH Properties currently manages more than 2,000 multifamily units across numerous markets, and expects the affordable housing push to run adjacent to its multifamily platform. The Los Angeles-based firm has offices in Dallas, Seattle, Phoenix, Houston and Riverside, Calif.
The firm said that its new affordable housing investment initiative will rely heavily on the low income housing tax credit (LIHTC), used primarily by the Department of Housing and Urban Development to spur development and construction, along with Section 8, a federal subsidy that helps low- to moderate-income families rent on the private market, and age-restricted, or senior housing.
BH Properties President Jim Brooks emphasized that the firm’s affordable housing strategy was influenced by the “annuity-like nature” of the asset class’ income stream, rather than the assumption of tax credits supplied by the federal and state programs.
“We will be looking at assets with 100 or more units, typically following the expiration of the 15-year compliance period, where we can then hold them for as long as a decade,” Brooks said in a statement. “We believe we can benefit from the durable and consistent cash flow that a professionally managed asset can generate.”
Founded 30 years ago, BH Properties both acquires and manages property across the country. The firm also has a sweet spot of repositioning value-add assets, along with handling distressed debt, gap financing, and ground leases. Its portfolio includes Lincoln Center, a retail space in Miami; and Mason Creek II, a 127,000-square-foot office property in Katy, Texas.
Brian Pascus can be reached at firstname.lastname@example.org