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Foundation partners form social-purpose REIT.

A NEWLY FORMED PARTNERSHIP of two major philanthropic foundations--the John D. and Catherine T. MacArthur Foundation and the Ford Foundation--and three Wall Street titans--Citi, Morgan Stanley, Prudential Financial Inc.--has raised $1.00 million.

They have also established an equity trust that will operate as a REIT and partner with members to buy unsubsidized multifamily housing on the open market. The Housing Partnership Equity Trust (HPET) was formed as a social-purpose REIT.

Headquartered in Washington, D.C., it provides a ready source of low-cost, long-term capital, enabling a dozen mission-driven nonprofits to acquire apartment communities for the purpose of providing homes for households with modest incomes. Its first transaction closed earlier this month in Aurora, Ill.

HPET Chief Executive Drew Ades comments, "The Housing Partnership Equity Trust demonstrates a new approach to funding affordable housing--one that will streamline the capital-raising process for acquiring affordable housing units and sharply reduce transaction costs as well as the time it takes to close on a transaction." Before joining HEPT, Ades was involved in the multifamily housing business at Fannie Mae.

--NAA Industry Insider
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Title Annotation:Development
Date:Jun 1, 2013
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