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Orix to Grow LIHTC Platform to $15B with Acquisition of Boston Capital’s Portfolio

Boston Capital's LIHTC portfolio includes funds for the development of Robert L. Harnois Apartments, a 61-unit seniors housing community underway in Westbrook, Maine (rendering above). To date, Boston Capital has invested in nearly 3,300 affordable apartments in Maine alone.

BOSTON — Boston Financial Investment Management, a subsidiary of Orix Corp. USA, has agreed to acquire Boston Capital’s low-income housing tax credit (LIHTC) fund portfolio. The purchase of Boston Capital’s portfolio will nearly double Orix’s LIHTC platform to $15 billion in funds under management. (Boston Financial and Boston Capital are not affiliated.)

Boston Financial is one of the leading syndicators in the LIHTC industry. The firm currently manages a $7.7 billion portfolio comprising more than 1,125 properties and 98,110 units. Boston Financial will service Boston Capital’s assets under management.

According to a release from Orix, the firm views the LIHTC business as one that shows projected growth, even during the economic uncertainty of the COVID-19 pandemic. Because rent for LIHTC properties is often below comparable non-tax-credit properties and the government supports many LIHTC residents in the form of rental assistance, Boston Financial has seen occupancy rates remain stable during the pandemic.

The closing of the transaction is subject to customary closing conditions and approvals. The acquisition price was not disclosed.

Established by Congress in 1986, LIHTC is a tax incentive program designed to promote the supply of affordable rental housing for low-income households.

LIHTC syndicators such as Boston Financial and Boston Capital bridge the gap between affordable housing developers seeking to raise funds by selling the 10-year tax credits and the needs of investors pursuing the tax advantages of the tax credits, which are issued by state and territorial governments.

Orix Corp. USA, the American subsidiary of Tokyo-based Orix Corp., has built a comprehensive portfolio in various multifamily finance businesses through its acquisitions of Boston Financial, RED Capital Group, Lancaster Pollard, NXT Capital and Hunt Real Estate Capital. Orix Corp. is traded on the Tokyo Stock Exchange and New York Stock Exchange.

Orix USA and its family of companies have $78 billion of assets under management, administration and servicing as of July 2020, including $11 billion held by the company and its subsidiaries. The company’s team comprises more than 1,200 employees spanning more than 50 offices across the U.S. and Brazil.

Founded in 1974, Boston Capital is one of the longest-tenured syndicators in the LIHTC industry and one of the largest owners of apartment properties in the United States. Since the inception of the LIHTC program in 1986, Boston Capital has raised more than $10.5 billion of investor equity into more than 3,500 affordable housing properties nationwide.

— John Nelson

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