Lincoln Avenue Capital Takes Majority Stake in HPET
Through the transaction, Lincoln will purchase at least $150 million annually in workforce and affordable properties.
Calling it a landmark national partnership to create more affordable housing across the United States, Lincoln Avenue Capital has agreed to acquire a majority stake in the Housing Partnership Equity Trust.
The transaction is expected to close by the end of this year and would make Lincoln Avenue Capital one of the largest, single private investors in affordable housing. In partnership with HPET nonprofits, Lincoln Avenue Capital plans to purchase at least $150 million annually in workforce and affordable housing to expand HPET’s investments.
It will continue HPET’s traditional focus on largely unsubsidized affordable housing, or naturally occurring affordable housing, that has rents lower than those in the area’s market. Under Lincoln Avenue Capital’s leadership, HPET will continue to seek out new housing investments opportunities and additional private capital.
A social purpose REIT, HPET was founded nine years ago by major Wall Street banks, prominent foundations and nonprofit housing organizations that came together to pioneer an innovative approach to affordable housing and preservation. HPET has been principally owned by some of the nation’s largest and most respected not-for-profit developers and operators of affordable and workforce housing.
Milestone for Affordable Housing
In addition to Lincoln Avenue Capital, which will own the majority stake, the REIT’s other institutional investors include the John D. and Catherine T. MacArthur Foundation. HPET’s nonprofit partners will retain 7.5 percent of the company. Other investment partners include Prudential Impact Investments Private Equity LLC; Citibank N.A.; Morgan Stanley Bank N.A.; and Charles Schwab Bank SSB.
Anne McCulloch, HPET president & CEO, called the pending deal with Lincoln Avenue Capital a new chapter for HPET and a milestone for the affordable housing industry. By teaming with a leading impact investing partner, HPET will provide a path forward in making housing more affordable in the U.S., she said in prepared remarks.
Jeremy Bronfman, founder & CEO of Lincoln Avenue Capital, said in a prepared statement the company is focused on advancing solutions in affordable housing and creating impact for future generations. He said this new chapter for HPET shows what is possible when mission-driven businesses, nonprofit organizations and foundations come together to tackle the pressing need for affordable and workforce housing.
Lincoln Avenue Capital provides housing for low-income individuals, seniors and families nationwide. The firm’s portfolio includes at least 88 properties with more than 15,000 units serving more than 43,000 residents in 14 states. In August 2020, the company acquired the 384-unit Stratford Point apartment community in Orlando, Fla., for $38 million from Picerne Real Estate Group.
Earlier that year, Lincoln Avenue Capital purchased Southern Highlands, a 151-unit senior housing property in National City, Calif., for $22.1 million from Shefflin Investments. Beekman Advisors acted as investment banker for HPET in the transaction.