Camden, April 25, 2023 — The Michaels Organization, a national leader in residential real estate, announced today that it has closed on the largest affordable housing acquisition in its 50-year history as an owner, developer, and manager of affordable housing. The $1.2 billion acquisition, done in Joint Venture partnership with the Urban Investment Group within Goldman Sachs Asset Management, and the Community Development Trust (CDT), ensures that more than 10,000 units across eight states will be preserved for long-term affordability.
The Joint Venture Partnership, known as the Essential Housing Impact Partnership, was spearheaded by Michaels, which is the largest private-sector owner of affordable housing in the country. The acquisition was led by Michaels Vice President of Capital Markets Cristhian Codorniu and Vice President of Acquisitions Kunal Chothani.
“The need for high-quality housing is greater than ever, and preserving these critical affordable housing assets will ensure that they continue to serve both families and seniors with low and moderate incomes for generations to come,” said Michaels’ Chothani. “We are grateful to our joint venture partners for their commitment and to the seller for entrusting us with this unique preservation opportunity.”
Located in Florida, Illinois, Indiana, Kentucky, New York, South Carolina, Texas, and Wisconsin, the majority of the acquired properties were developed or rehabilitated with Low Income Housing Tax Credits and are primarily in their extended-use compliance periods. This diverse portfolio ranges from high-cost primary metropolitan cities to ex-urban/rural communities, many of which offer limited quality affordable housing options.
“We are so proud of this joint venture partnership and that our combined resources will enable us to preserve these essential affordable housing communities, and we are thrilled that we were able to get this very complicated transaction to the finish line, despite all the recent economic disruptions in the Capital Markets,” said Codorniu.
All 90 affordable housing communities in the transaction were acquired from Harmony Housing, a non-profit organization originally conceived by Steve Rosenberg, CEO of real estate finance firm Greystone, and all were previously managed by Greystone Property Management Corporation (GPMC). The communities are now being managed by Michaels.
Both on-site and corporate team members from GPMC who were previously involved in the management of these communities have joined Michaels’ team as part of this acquisition.
“It has been a pleasure working with the hundreds of dedicated property management team members over the years, and I know they will find a like-minded organization and company culture in The Michaels Organization,” said Kerry Brewer, head of GPMC.
In a separate but related transaction, Michaels will also serve as the property manager for 31 communities, all in North Carolina, which are being acquired from Harmony Housing by Foresight, a non-profit organization with a long-standing relationship with The Michaels Organization.
“The importance of preserving high-quality affordable housing cannot be overstated, yet it requires the capability of navigating complex financial and policy issues,” said John J. O’Donnell, Michaels CEO. “To be able to bring the strength of Michaels, UIG, and CDT together for this transaction, allowed us to do exactly what our partnership name implies: Have impact that is essential.”
Much of Michaels’ growth as an organization has been the result of acquisitions during its 50 years as a multifamily developer, asset manager, and property manager. In 2022, Michaels acquired 1,500 affordable apartment homes in Indiana and 15,000 units of privatized military housing in 2021.
With this latest acquisition, Michaels will be now managing more than 74,000 units across 39 states, D.C., and the U.S. Virgin Islands.
The financial closing occurred on April 12.
