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
- Paid over $1.89 million in dividends to both preferred and common investors
- Allocated 95% of called capital to property level investments ($67 million)
- 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
