HVPG JV Acquires Affordable Housing Portfolio
These properties are located primarily in three major western markets.
Hudson Valley Property Group, in a joint venture with Wheelock Street Capital, has acquired a 22-property affordable housing portfolio comprising 4,768 units in the western U.S. The properties’ transition to HVPG ownership will involve renovations to bring them in line with the standards of the firm’s entire portfolio.
HVPG acquired the portfolio from Inland Group. Wheelock Street Capital, a private real estate investment firm, provided the majority of the equity out of its Long Term Value Fund. Goldman Sachs advised the seller, while Newmark served as the broker.
Thirteen of the properties are located in Washington, seven are in Colorado, one is located in California and the other is in Idaho. The communities are concentrated largely in the Denver, Seattle and Spokane metro areas. The properties are subject to low-income housing tax credit rent restrictions and residents must be income qualified, earning no more than 60 percent of Area Median Income.
The previous owners built high-quality apartment buildings fostering a sense of community, which HVPG will build upon through further renovations, HVPG Co-Founder and Managing Partner Jason Bordainick told Multi-Housing News.
Besides physical improvements to the properties, Bordainick said the company will implement its community enhancement program across the 22 properties. That initiative involves security upgrades, such as site-specific emergency plans, active collaboration with local police departments and enhanced, high-definition monitoring systems providing sitewide coverage.
HVPG has also entered partnerships with Washington State Housing Finance Commission and Colorado Housing and Finance Authority, and other nonprofit organizations, such as Hearthstone Housing Foundation and Horizon Housing Alliance, to seek to ensure long-term affordability for the communities.
Earlier this year, HVPG acquired a five-property portfolio including 1140 units in the Washington, D.C., area and in North Carolina. The deal, with total project costs of $208 million, represented an expansion in the Mid-Atlantic and Southeast. The North Carolina community is the company’s first in that state.
HVPG has expanded to the Midwest and now the West, while also increasing its footprint in the Mid-Atlantic and Southeast. The company’s holdings span 12 states, including 87 communities with 15,414 units nationwide.
Affordable housing shortage persists
Affordable housing remains in critical short supply nationwide, with the prospect that development will taper off somewhat after 2025, leaving the problem as large as ever. Residential rents are up 26 percent nationwide since early 2020 and are still rising in three out of every five markets, according to the Joint Center for Housing Studies of Harvard University.
Higher costs hit despite a post-pandemic surge in development that slowed with the onset of higher interest rates, with much of the new stock for upper-end renters. Half of all renter households—22.4 million all together—spent more than 30 percent of their income on housing and utilities the last time that metric was assessed in 2022, up 2 million from 2019 and the highest number on record, JCHS noted.
Deliveries of fully affordable housing in the U.S. are expected to come in at 69,600 units this year, and then proceed to a peak of 70,500 units in 2025, before dropping significantly after that, according to a new study of Yardi Matrix’s affordable housing database. By 2026, the recent contraction in development will be felt in the lower pace of units coming online.
