A new partnership hits the real estate market. Forming a new company, the partnership aims to provide affordable housing to as many people as possible.
Low Income Housing Tax Credit industry leader Michael Costa, Highridge Partners and Citi form Highridge Costa Housing Partners to manage a portfolio amounting to $3.4 billion, consisting of 275 affordable, multifamily properties. Each one will play a part and contribute something to the newly-formed partnership in meeting its mission of seeking new opportunities as well as managing the current portfolio built in the last 15 years.
Citi will be contributing a previously foreclosed portfolio, which was also made in partnership with Costa. On the other hand, Highridge Partners can not only provide global capital markets relationships and strategic financial management perspective but new equity capital as well. Costa, with his business acumen and unparalleled experience in the tax credit syndication, will contribute highly through strategic planning.
Citi Community Capital’s managing director Steven N. Fayne says, “We explored several options for these properties and determined that a partnership with Highridge Costa maintains much needed affordable housing throughout the United States while protecting Citi’s investment.”
The company’s 275-property portfolio represents 80,000 residents in Puerto Rico and 24 states – half of them are located in California. These properties were developed through low-income housing tax credits.
During Citi’s ownership of the properties, Costa was managing them – this will account for a smooth transition from Citi to Highridge Costa Housing Partners. With the business recapitalization, it will surely be stronger and more stable moving forward, says Highridge Partners founder John Long.
Highridge Costa Housing Partners also plans to partner with other financial institutions with which it has already formed long standing relationships. Included in the list are Fannie Mae and Freddie Mac, American Express, Bank of America, J.P. Morgan Chase, Wells Fargo, Zurich Financial Services Group, Union Bank, and Ambac Financial Group Inc.
Using a separate operating company, Highridge Costa also aims to develop affordable communities in California under the tax credit program. There are seven projects in different stages of pre-development, with one plan for a 62-unit project in Hesperia, California set for groundbreaking in 30 days.