May 02Saving Affordable Housing
Source: Wall Street Journal
An apartment complex in suburban Chicago was saved from the clutches of gentrification by a private real-estate investment trust formed to buy and protect affordable housing.
The property, serving a working-class section of Aurora, Ill., was acquired for $5.2 million by a Chicago unit of Denver-based Mercy Housing Inc. in a joint venture with Housing Partnership Equity Trust, a private REIT that was created by Mercy and 11 other housing-related nonprofits.
A newly formed REIT purchased this Chicago-area apartment community to keep the rents affordable.
Although the deal was small, it is significant in that it was the first acquisition made by a real-estate company owned and operated by nonprofits and illustrates how organizations with a social mission can use the for-profit structure to advance their goals.
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