HIT Invests in Green Multifamily

Washington, D.C.--The AFL-CIO Housing Investment Trust has made a foray into energy-efficient developments, including multifamily projects and mixed-use projects with multifamily components.

Dees Stribling, Contributing Editor

Washington, D.C.–The AFL-CIO Housing Investment Trust (HIT) has made a foray into energy-efficient developments recently, including multifamily projects and mixed-use projects with multifamily components. A number of these developments have received, or are on track to receive, LEED certification for their sustainable energy designs and green construction strategies.

Thus far, HIT has provided $274 million of financing for 11 such projects. They total 1,653 housing units and have created about 4,100 union construction jobs, notes HIT, while representing more than $660 million of development activity in California, Massachusetts, Minnesota and other places.

In San Francisco, for instance, HIT committed $32.5 million last year for Arc Light Co., which involved the conversion of a historic commercial building into a multifamily development. The developer of the $48 million project in the city’s South Beach area is seeking LEED Gold certification for the 94-unit complex.

In Boston, HIT provided over $2 million to help finance the $29 million third phase of Maverick Landing, which involved replacing deteriorated housing with 92 new rental units. The project achieved LEED certification following the redevelopment work, and was the 2009 winner of the I. Donald Terner Prize, which cited Maverick Landing as “Massachusetts’s first green, affordable multifamily housing development, adhering to healthy homes principles and achieving LEED certification.

In St. Louis Park, Minnesota, a suburb of Minneapolis, HIT provided $55.5 million for the $61.7 million Excelsior & Grand, which created 337 housing units. The project won the nation’s first “LEED for Neighborhood Development” certification.

Investing in green properties continues the trust’s longstanding practice of socially responsible investing, says HIT. Currently, the trust manages nearly $3.9 billion in assets for about 350 investors, which include union and public employee pension plans. HIT invests primarily in government- and agency-insured and -guaranteed multifamily and single-family MBS.

HIT also posits that sustainable properties will offer better returns. “The long-term asset values of these properties is improved by being sustainable,” Ted Chandler, COO of HIT, tells MHN. “Lower operating costs make the property more competitive, and better able to attract tenants, and so in the long term the asset values will be stronger.”