Local affordable housing investor raises $300M

Austin-based Comunidad Partners announced this month it has closed a $300 million discretionary fund just seven months after it opened. The funding will go to purchasing, renovating and developing affordable and workforce housing throughout the Sun Belt, with projects already underway in Austin.

The funding came from a mix of pension funds, university endowments, nonprofits and family offices, far surpassing its goal of $200 million. This is the first such fund for the company, which previously funded its projects through individual joint ventures.

The company has bought 11 properties totaling 1,832 units with the funds so far, using about a third of the available funding. Two of those properties are in Austin, and Marquez said others are under contract.

The company bought an apartment complex in North Austin that was built in the 1980s. Marquez said they plan to renovate the building — which was previously owned by an out-of-state owner — and put in a soccer field and improve some of the other community amenities. They’ve rebranding the community Villas de la Plaza.

They purchased another community, Villas de Sendero, north of Mueller in the St. John’s neighborhood. Half of the 180 units will be restricted to residents earning 60% or less of the median area income.

Comunidad Partners, which is vertically-integrated, focuses on housing in traditionally underserved neighborhoods, with a special focus on renovating existing and infill housing options. In addition to renovations, the company implements social programs including health and wellness, after-school programs and English as a second language courses at its communities.

The company has operated for about 15 years. Marquez said Comunidad was inspired by his father, who immigrated to the U.S. and eventually started his own wholesale grocery out of his garage. As that business boomed, he began investing in commercial real estate.

“Comunidad is a for-profit that is very mission-based, and it’s a way for us to give back through real estate as a vehicle for change and a vehicle for opportunity for these communities,” Marquez said.

Marquez said there doesn’t have to be a dissonance between affordable housing development and profitability.

“Our strategy isn’t predicated on getting top of market rent; it’s getting a reasonable rent, but also keeping residents in place for a long period of time, keeping housing stability, not displacing tenants,” Marquez said. “That keeps occupancy higher, keeps our delinquency very low, our evictions very low. We have lower turnover cost, lower marketing costs. It all drops to the bottom line.”

Affordable housing is becoming a more urgent need in Austin, as the median home price reached $565,000 in February, according to the Austin Board of Realtors. This price appreciation comes on top of an already-low supply of affordable options for buyers.

In 2017, the city adopted its Strategic Housing Blueprint, setting a 10-year goal to create 135,000 new housing units. As of 2020, the city was not on pace to reach this goal.

Source: Austin Business Journal: https://www.bizjournals.com/austin/news/2022/03/28/local-affordable-housing-investor-raises-300m.html