Fairstead Commits $500M to Affordable Housing Strategy

Park 79. Image courtesy of Faristead

Fairstead has added $500 million of equity commitment to bolster its efforts of building and securing affordable housing throughout the U.S.

The $500 million equity commitment came from the firm’s key investors and will be used to expand Fairstead’s portfolio, grow the firm’s operations and enhance the programming offered throughout its communities.

Jeff Goldberg, CEO of Fairstead, said in prepared remarks that the firm has to commit financial resources to create sustainable housing, but also invest in proptech solutions and collaborate with community and government leaders to develop impactful programming. He added in his prepared statement that the lack of quality housing is one of the most important issues facing the U.S. today.

The equity commitment will be used to expand Fairstead’s operations and portfolio in various states, through ground-up construction projects and renovation or preservation deals of multifamily affordable and workforce housing. Fairstead’s current pipeline includes the renovation of a shuttered hotel into Park 79, a 77-unit affordable senior housing community in Manhattan’s Upper West Side.

Fairstead is also planning to invest in proptech, especially for innovative technology that will improve the affordable housing industry. The firm has already invested in Enviro Power, an energy tech company that revamps traditional heating infrastructure with its SmartWatt Boiler tech. Fairstead has given funding for Enviro Power and also sits on the company’s board of directors, but is also looking at deploying the systems at some of its properties.

The firm also hired Tricia Yarger, who previously spent more than a decade as a director at Citi, to lead the company’s capital markets team. Yarger will join the Fairstead team in November, where she will manage the firm’s debt and equity relationships while attracting outside capital to Fairstead properties.

FAIRSTEAD’S $2.3B PIPELINE

Prior to the $500 million commitment, Fairstead has been steadily building up its portfolio of multifamily properties since 2014. The portfolio, which now totals more than $4 billion in acquisitions or developments, includes the firm’s recent acquisition of a 250-unit permanently affordable senior housing community in Naples, Fla., for nearly $60 million in February. Fairstead also acquired a partially affordable 149-unit community in Jacksonville, Fla., a month prior.

Looking ahead, Fairstead has an identified pipeline that’s valued at more than $2.3 billion in new acquisitions across the country in Florida, Kentucky, New Jersey, New York, Pennsylvania and Washington, D.C. The firm is also expecting to grow its portfolio by 50 percent in the next 12 months.