Overview

The Housing Partnership Equity Trust was an aspirational idea when conceived to address a significant capital gap for strong nonprofit multifamily owners. At the core of this idea was to bring together some of the best nonprofit owners of affordable housing with strong institutional and impact investors to create a REIT whose mission is to secure the future of affordable rental housing in communities across the country. And since its founding, HPET has been proving the power of that idea.

Housing Partnership Equity Trust is the first real estate investment trust owned and operated by nonprofits to preserve affordable rental homes for lower and middle income residents. The social-purpose REIT, sponsored by HPN and owned by 14 HPN members, invests long-term, low-cost equity alongside its nonprofit partners. It was created as a solution for members competing against commercial developers with easy access to cash where they would otherwise need months, sometimes years, to raise funds to purchase properties. 

cash flow

Acquire stabilized properties in opportunity markets where we can increase cash flow through tax abatements, energy improvements, or other operating efficiencies and enhancements without pushing rents.

value add

Acquire naturally occurring affordable housing properties that are well-occupied and provide a stable cash flow. Improve property performance through strategic investments that improve resident satisfaction, increase energy efficiency, reduce operating costs and lower tenant turnover.

redevelopment

Acquire properties in need of renovation that can be funded through our capital or by facilitating a LIHTC syndication by our Nonprofit Partner.

Investment Strategy

The Housing Partnership Equity Trust typically invests in workforce housing that has no government subsidy or rent regulation.

Launched with a $100 million investment in 2013, HPET and its members have deployed HPET capital to purchase 14 properties consisting of over 2,900 unit available to moderate-income households across the country. 

HPET Property Portfolio

Property Location Managing Member Units Acquisition Year Purchase Price
2000 Illinois Aurora, IL Mercy 128 2013 $5,200,000
Woodside Court Fairfield, CA Eden 129 2013 $12,000,000
Woodmere Trace Norfolk, VA CPDC 300 2013 $15,250,000
Mallard Point Channahon, IL HHDC 173 2014 $19,400,000
The Birches Silver Spring, MD AHC 228 2014 $33,500,000
Bradford Hagerstown, MD HFA/NHTE 418 2015 $26,250,000
Savannah West Sacramento, CA Eden 228 2015 $30,000,000
Dunfield Nottingham, MD AHC 312 2015 $52,000,000
Dove Landing Virginia Beach, VA CPDC 318 2016 $18,000,000
Golden Star & Sunplace Maplewood & Roseville, MN Aeon 109 & 30 2016 $10,050,000
Meadow Ridge Las Vegas, NV Nevada Hand 232 2016 $22,600,000
Encanto Phoenix, AZ CPLC 160 2017 $8,800,000
Pacific Villas Stockton, CA LINC Housing 86 2017 $6,500,000
Quail Run San Leandro, CA Eden 104 2018 $24,000,000

HPET's real estate portfolio continues to grow with positive performance from existing investments and acquisitions that expand ownership into new markets. 

Delivering Returns

This collaborative platform, created by the Housing Partnership Network and 12 of its Nonprofit Members, continues to grow and develop.

2014 - 20163-Year REIT Performance

2014 2015 2016
Cash Proceeds from Acquisition Fees $509,500 $770,468 $334,875
Cash Distributions from Property Operations $575,265 $3,105,232 $4,410,199
Cash Distributions from Refinancing - $3,729,192 -
Cash Proceeds from Sale of Property - - $6,670,000
Cash Distributions to Pay Corporate Debt $626,607 $468,500 -
TOTAL CASH INFLOWS $1,711,372 $8,073,392 $11,415,074
Controllable Operating Expenses $1,434,983 $2,416,036 $2,624,880
Interest Expense for Corporate Debt $636,211 $597,891 $107,310
Dividends Paid - $1,899,804 $1,780,418
TOTAL CASH OUTFLOWS $2,071,194 $4,913,731 $4,512,608

2015/2016 accomplishments

  1. Paid over $1.89 million in dividends to both preferred and common investors
  2. Allocated 95% of called capital to property level investments ($67 million)
  3. Exceeded affordability target – the average rent on the portfolio was below the rent affordable to a family earning 60% of AMI

Measuring Impact

HPET’s properties are located in markets with amenities that allow residents the opportunity to thrive and improve the lives of their families. Each acquisition is assessed for its proximity to job centers, retail, grocery stores, parks, well-rated schools, Head Start programs, community health centers, public transportation, anchor institutions, and banks. 

To generate savings for the residents, the properties and for itself, HPET is creating energy efficiency and reducing its carbon footprint through the identification and installation of needed upgrades, successful program implementation (including resident and property management training), and ongoing tracking and monitoring. 

To enhance the health and well-being of residents and to being good stewards of the environment, HPET utilizes a range of property upgrades and management practices that support a healthier living environment for its residents, including using low VOC paints and carpeting with CRI Green label standards, and supporting smoke-free initiatives.

Most importantly, HPET and its member partners are committed to maintaining affordable rent levels at each of their properties.  As a result, the average rent for the portfolio is below the rent affordable to a family earning 60% of area median income.  

Measuring Mission ImpactOpportunity Scorecard

HPET’s properties are located in markets with amenities that allow residents the opportunity to thrive

Job Centers Retail Grocery Parks Schools (>5 Rating) Head Start Program Community Health Centers Transit to Urban Core
Total Portfolio (% of units)* 100% 100% 81% 89% 74% 100% 94% 94%
*as of 12/31/17

Average portfolio rents remain affordable across HPET's markets at 57.4% AMI

Number of Units Average Rents 60% of AMI 80% of AMI 100% of AMI
Total Portfolio 2,955 $985 $1,030 $1,372 $1,715

Partners

Management Team

Board of Directors

Cynthia A. Parker

President and CEO, BRIDGE Housing Corporation

David Adame

President And CEO, Chicanos Por La Causa

Luke Apicella

Manager, Prudential Impact Investments

Rebecca Regan

Executive Vice President, HPN

Neal T. Drobenare

Senior Vice President Acquisitions, NHP Foundation (NHPF)

Aaron Gornstein

President and CEO, Preservation of Affordable Housing

Linda Mandolini

President, Eden Housing

Jeff Meyers

Director, Structured Lending and Investments, Citi Community Capital

J. Michael Pitchford

President and CEO, Community Preservation and Development Corporation

Brian Shuman

Chief Financial Officer, LINC Housing

Peter Vilim

Vice Chairman and Co-Founder, Waterton

Aaron Gornstein

President and CEO, Preservation of Affordable Housing

Collete English Dixon

Executive Director, Marshall Bennett Institute of Real Estate, Roosevelt University

David Ferrero

Currently unaffiliated

Follow HPN's innovations and opportunities.

Economic opportunity begins at home in strong, stable communities. At HPN, we harness the collective strength of our members to launch innovative financial, business, and operational enterprises that provide more opportunities for people, their communities, and the organizations investing in them.

get updates