A shortage of apartments and rising rents in the Twin Cities metro have made area apartment buildings a hot commodity among national investors who are often able to improve the buildings and increase rents. That is a threat to the already tight supply of rentals that are affordable to the lowest-wage families.
And that is why Twin Cities nonprofits are leading an effort to preserve what is called "naturally occurring affordable housing," meaning rentals that are below market rate without subsidy of any kind.
The latest win for such apartments, dubbed NOAH, in the Twin Cities happened when the NOAH Impact Fund of Greater Minnesota Housing Fund (GMHF), Enterprise Community Investment Inc. and Aeon put together a $77 million purchase of 768 rental apartments in 10 properties.
The deal is the largest acquisition in the 31-year history of Aeon, which develops, owns and manages affordable homes in the metro. It is also the first project that was funded by GMHF's new $25 million NOAH Impact Fund, which was set up to help preserve NOAH properties in Minnesota.
Enterprise Community Investment is a nonprofit that focuses on increasing affordable housing that is connected to important resources for families, including health care, jobs and transportation.
The three entities worked with BMO Harris to offer $12.65 million in equity. The Bloomington Housing and Redevelopment Authority and the St. Paul Housing and Redevelopment Authority also participated.
Aeon said more Minnesotans pay more than 30 percent of their income for housing, forcing them into difficult choices on basic spending.
"This purchase with GMHF, Enterprise and our other partners, is a model for how communities can work together to preserve affordable homes," Alan Arthur, Aeon's chief executive, said in a statement. "Saving our existing stock of affordable homes is as important — if not more urgent — than developing new ones."
The deal was brokered by Keith Collins, Ted Abramson, Abe Appert and Laura Hanneman from CBRE's Minneapolis office. The seller was Hillaway Investments LLC.
Buildings in the portfolio were largely built between 1964 and 1970, and all of them were 100 percent occupied at the time of the acquisition, including:
• 55-unit Arbors in Bloomington.
• 48-unit Cedar Gate in Bloomington
• 64-unit Cedar Glen in Bloomington
• 48-unit Masada Manor in Bloomington
• 108-unit Metropolitan Towers in Bloomington
• 86-unit Nicollet Court in Bloomington
• 50-unit Lynwood Pointe in Brooklyn Center
• 140-unit Bass Lake Crossing in New Hope
• 87-unit Kings Manor in New Hope
• 82-unit Larpenteur Villa in St. Paul