Commercial/Multifamily Briefs April 27, 2023
Freddie Mac Multifamily Impact Bonds Surpass $15 Billion Mark
Freddie Mac Multifamily, McLean, Va., released its annual Impact Bonds Report detailing the company’s efforts to issue more than $15 billion in Green, Social and Sustainability Bonds since 2019.
“Transparency is a foundational component to our Impact Bonds program,” said Robert Koontz, head of Capital Markets for Freddie Mac Multifamily. “Through Freddie Mac’s annual Impact Bonds Report, we reiterate our commitment to reporting and summarize how we support rental housing that is green and affordable in communities that need it most. Each year, this report highlights our most impactful deals and how we are providing investors with innovative ways to support efficient and affordable housing.”
The Impact Bonds Report highlights properties and impacts across Green, Social and Sustainability Bonds:
–$5 billion in Green Bonds since 2019: Green Bonds are backed by multifamily loans that incentivize energy- and water-efficiency improvements at workforce housing properties. Tenants in these properties are projected to save an average of $255 per unit annually through lower utility costs as a direct result of the green improvements. In 2022, the environmental impact included water improvements projected to save over 41 million gallons of water per year–the equivalent of filling the Lincoln Memorial Reflecting Pool in Washington, D.C., six times or the annual water usage for over 453 households across America. In addition, 94% of units supported by Green Bonds are affordable to families earning at or below 80% area median income.
–$4.6 billion in Social Bonds since 2020: Social Bonds focus on supporting affordable housing by providing liquidity to financial institutions with a distinct mission of addressing affordable housing challenges or providing financing targeted toward underserved populations. Of the units financed with Social Bonds proceeds in 2022, 51.7% of the units are affordable to families earning at or below 50% AMI. Over 150 of the loans underlying Freddie Mac’s Social Bond issuances since 2020 have supported underserved populations including people with disabilities, senior citizens, farmworkers, veterans and homeless persons through transitional housing. Freddie Mac was recognized by Environmental Finance for Social Bond of the Year for a 2022 transaction of $92.8 million in social bonds, supporting affordable housing for over 1,500 senior citizens across four housing properties in Arizona.
–$5.4 billion in Sustainability Bonds since 2020: Sustainability Bonds attract capital to support residents’ economic mobility and, more broadly, generate community economic growth and sustainability. Nearly 90% of units at properties with financing supported by the bonds are affordable to families earning 60% of AMI or less. In 2022, proceeds from Sustainability Bonds financed eight mixed-income properties, or 5.6% of all properties backing the Sustainability Bonds, with units affordable to tenants earning at or below 50% AMI and above 80% AMI. One of these properties is located in an Area of Concentrated Poverty, helping improve residential economic diversity, which leads to greater economic and social mobility within a community.
Standard Real Estate Investments, GCM Grosvenor Launch $150 Million Industrial Development Program
Standard Real Estate Investments LP, a minority-owned national real estate investment and development firm with offices in Los Angeles and Washington, D.C., announced a new investment venture with funds managed by GCM Grosvenor that will target equity investments in approximately $150 million of industrial property developments in markets across the U.S. over the next 12-18 months.
The Standard/GCM Grosvenor venture targets three to four transactions with a preference for shovel-ready warehouse/logistics properties in the 200,000-500,000 square foot range in major logistics markets nationwide.
“The mismatch between strong demand from businesses at both ends of the supply chain on one hand, and limited liquidity on the other, will enable our venture to step in and support quality projects with strong sponsorship,” said Lindsay Louie, Principal at Standard.
Standard is a national allocator of development capital, operated by a leadership team that previously invested in over $8 billion of assets. The company also runs a direct development business covering the Mid-Atlantic region.
