An affiliate of Orix Corp. has acquired one of the largest Low-Income Housing Tax Credit program fund portfolios in the U.S., doubling its portfolio with the addition of approximately 93,000 apartment units.
Orix subsidiary Boston Financial Investment Management entered into an agreement with Boston Capital to acquire approximately 1,200 properties in over 190 funds, according to the firm. Once the deal closes, Boston Financial will have around $15 billion of equity under management and will oversee a portfolio of 2,300 properties in more than 90 funds.
A spokesperson for Boston Financial declined to disclose the terms of the deal.
“Boston Capital is a leading equity syndicator in the LIHTC industry, and the acquisition of its portfolio of LIHTC fund general partnership interests will expand Boston Financial’s strategic footprint by adding significant fund assets to our platform,” Boston Financial CEO Greg Voyentzie told Multi-Housing News.
Voyentzie added that the firm’s newly expanded platform will help drive growth and allow the company to broaden its assistance to affordable housing stakeholders.
In March of this year, Boston Financial announced it had closed a $205 million LIHTC fund. The fund provided capital for the new construction and rehabilitation of multifamily properties in 14 states: California, Colorado, Florida, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, Nebraska, New York, Ohio, Texas, Washington and West Virginia.
Since 1986, Boston Financial has invested more than $13.1 billion of equity in LIHTC properties. The company currently manages a $7.7 billion portfolio with more than 1,125 properties and 98,110 units. Boston Financial said in its announcement that they see the LIHTC business as a segment that shows “projected growth,” even as economic uncertainty due to the COVID-19 pandemic continues.
Though the coronavirus pandemic has disproportionately impacted low-income multifamily properties, some investors still see affordable housing properties as a safe haven during difficult times. Affordable properties often have vouchers or other subsidies that help backstop impacts from a recession, and lower-income apartment units are often in higher demand.