Belveron Partners, an affordable housing and preservation-focused investment group, closed its sixth real estate investment fund at $280 million, exceeding its initial target of $250 million. The firm plans to use the fund to acquire and preserve approximately 5,000 units of affordable and workforce housing over the next three years in urban and suburban markets in the Northeast, Mid-Atlantic and Southwest.
Paul Odland, founder of the San Francisco-based firm, told Multi-Housing News that investors are a combination of institutional investors, family offices and individuals that have invested with Belveron since it was founded in 2006. Belveron, which also has an office in New York City, has raised more than $930 million from institutional investors and currently owns more than 30,000 units nationwide.
“We’ve added more institutional dollars as our fund size has grown, but our reinvestment rate among existing investors is very high,” Odland said. “Unlike traditional multifamily, there aren’t many sponsors who do what we do. In our space, you need to have a deep regulatory understanding of how the deals get penciled and a reputation that you’ll be a decent landlord. You have to prove that you are serious about making long-term investments that not only benefit your fund, but the broader community.”
Odland noted that affordable and workforce housing has become increasingly scarce and valuable in the U.S. and the ongoing COVID-19 pandemic has shined a light on the chasm between supply and demand. Managing Director Josh Plattner, who leads Belveron’s acquisition strategy, said in prepared remarks the firm has shown that private capital can be deployed to keep people in their homes and work with government and community organizations to address the nation’s affordable housing crisis.
Approximately one-third of the fund has been invested, including the recent acquisition of 1,500 market-rate apartments in high-demand metro areas of Houston and Austin, Texas. Belveron is working with local housing authorities to put at least half of the homes into new regulatory agreements catering to lower-income and working families. Odland said he could not provide more details at this time but did note the firm has invested in Project-Based Section 8 (both senior and family) and income-restricted properties.
Odland said the average deal is between 200 and 300 units and the portfolio is a blend of garden-style apartments and mid-rise towers, depending on the location and market.
“Most often, we look for opportunities based on existing relationships and in markets that we are already in. Texas, Wisconsin, Minnesota, Maryland and Florida are all areas of interest, as well as New York City and Boston,” Odland told MHN.
In October, Belveron partnered with LIHC Investment Group and the Boston Housing Authority to secure a new Project-Based Section 8 contract limiting the amount lower-income and elderly residents would pay at Mercantile Wharf, a 122-unit, mixed-income community. The agreement for the property, the only source of affordable housing in the historic North End neighborhood, will provide at least 20 years of affordability at the site.
In June, Belveron partnered with Camber Property Group and the New York City Department of Housing Preservation to acquire a portfolio of 384 rent-stabilized and market-rate homes in Brooklyn. In addition to preserving the affordability of the units, the new owners set aside 26 apartments for formerly homeless New Yorkers. The partners have also been addressing deferred maintenance, including bringing elevators up to code, for a total investment at the property of nearly $90 million.
In January, Belveron teamed up with LIHC Investment Group and Camber Property Group to purchase an affordable housing portfolio in the Bronx totaling 1,275 units from Cammeby’s International Group for $166 million.
Another important milestone for the firm in 2020 was the acquisition in October of Conifer Realty, a New York-based affordable owner, developer and manager. The deal strengthened Belveron’s East Coast presence with ownership of more than 15,300 units and a dozen new construction projects.