TAMPA, FLA. – The Wilson Co., a Tampa-based affordable housing developer and manager, has sold a 31-property portfolio of affordable housing communities in Florida for $563.5 million. Totaling 8,498 units, the portfolio is heavily concentrated in Orlando and Tampa.
Starwood Property Trust (NYSE: STWD), an affiliate of Starwood Capital Group, purchased the assets, which were developed between 1995 and 2004 using Low Income Housing Tax Credits (LIHTC). On average, maximum allowable rents across the portfolio are approximately $350 below average rents at nearby market-rate communities. The portfolio was more than 97 percent occupied at the time of sale.
“This transaction represents the beginning of a new era for LIHTC investment sales,” says Doug Childers, managing director of HFF’s investment sales team, which represented The Wilson Co. in the transaction.
“Traditionally, LIHTC transactions have attracted primarily private, regional capital providers. HFF’s affordable housing experts were able to educate institutional investors regarding the portfolio’s relatively low cash-flow volatility and the regulatory and operational nuances associated with LIHTC communities. As a result, we were able to create a competitive bidding process that included large, institutional investors,” added Childers.
Childers led HFF’s investment sales team in the transaction, along with HFF’s senior managing director Jason Nettles and managing director Matt Mitchell.
HFF also worked on behalf of Starwood Property Trust to secure financing totaling $255.9 million through Freddie Mac’s CME program for 19 of the 31 assets. HFF will service the securitized loans through its Freddie Mac seller/servicer program. Managing director Gregg Shapiro and executive managing director Jody Thornton led HFF’s debt placement team.
“Freddie Mac clearly demonstrated its commitment to affordable housing through its creativity and collaboration in order to provide attractive financing that supported Starwood’s acquisition of this portfolio,” says Shapiro. “The financing put the borrower in a position to not only achieve its targeted returns on its investment, but also to continue to invest in these communities and ensure that they provide high-quality affordable housing long-term.”
Founded by Jack Wilson in 1980, The Wilson Co. offers property management and development services, with specialization as a builder and manager of affordable housing communities throughout Florida. The company manages commercial properties, including the Franklin Exchange Building in downtown Tampa, which serves as the company’s headquarters. Jack’s wife Carolyn has served as the president of The Wilson Co. since 2003.
“My husband would have been proud of what we have accomplished here. The sale of the portfolio is the culmination of ‘The House that Jack Built,’” said Wilson.
Starwood Property Trust is the largest commercial mortgage REIT in the United States. The REIT has deployed approximately $27 billion of capital since its inception and operates through its subsidiaries LNR Property LLC and Hatfield Philips International. The company’s stock price closed on Wednesday, June 15 at $20.75 per share, down from $22.66 per share at this time last year.
– John Nelson