Clare Kennedy reported on Aeon’s purchase of 10 older apartment buildings in Finance & Commerce’s Nov. 1, 2017 issue.
In one $77 million mega-deal, nonprofit housing developer Aeon has purchased a portfolio of 10 older apartment buildings comprising 768 units.
The Minneapolis-based affordable housing developer and owner closed Tuesday on the transaction. Six of the properties are in Bloomington, one is in St. Paul and the others in New Hope and Brooklyn Center.
The seller was Hillaway Investments LLC, an entity controlled by the children of the late Miles Fiterman.
The total purchase price works out to an average of $100,260 per unit. …
“We’re saving as much naturally occurring affordable housing as we can,” Arthur said. “When it comes to housing, we are headed toward the roughest period for low-income people since the 1930s, and even if I’m half-wrong they’ll have tough times.” …
Arthur said Aeon has had its eye on the properties for at least two years.
“We had talked to the owners about buying from them directly, but they decided to go out on the open market,” Arthur said.
The buildings, constructed in the 1960s and 1970s, are in solid shape, Arthur said. About three-quarters of the properties were developed by the Fitermans, and the rest were acquisitions. …
Aeon’s financing for the deal involved a complicated mix of sources. Cleveland, Ohio-based Bellwether Enterprise acted as the mortgage lender and Tysons, Virginia-based Freddie Mac provided loan capital, Arthur said.
The portfolio has been split for financing purposes, he said.
Columbia, Maryland-based nonprofit Enterprise Capital is the major equity partner for about two-thirds of the portfolio. Aeon is the managing equity partner for both sides. The St. Paul-based Greater Minnesota Housing Fund’s NOAH impact initiative is Aeon’s major equity partner for the remaining third. The NOAH Impact Fund is a public-private partnership involving Bremer Bank, Sunrise Banks, Western Bank – A Division of American National Bank, Minnesota Housing Finance Agency, Hennepin County, the McKnight Foundation and Otto Bremer Trust.