Acquisition pushes the asset manager’s affordable housing assets to $6.4 billion By Will Parker May 9, 2023 3:00 pm ET New York City area properties include several large apartment buildings in the Bronx, Brooklyn and Queens. PHOTO: GARY HERSHORN/GETTY IMAGES Nuveen, the asset management arm of Teachers Insurance and Annuity Association of America, is acquiring a more than 12,000-unit affordable housing portfolio in one of the largest multifamily housing deals this year. The properties are largely concentrated in the New York City area, including several large apartment buildings in the Bronx, Brooklyn and Queens. Other buildings are located in Maryland, Massachusetts, Texas and other states, Nuveen said on Tuesday. The portfolio includes developable land and existing buildings in need of rehabilitation that could eventually produce an additional 8,000 low-income apartments, Nuveen said. Nuveen declined to share the price paid for the buildings, but said the deal is part of more than $3 billion in recent acquisitions, inclusive of debt, that have doubled the size of the company’s affordable housing assets under management to $6.4 billion. The sale comes at a time when investors have begun to turn away from market-rate apartments due to declining rent growth. NEWSLETTER SIGN-UP Real Estate From aspirational residences to major commercial deals. Subscribe Affordable housing provides a reliable return for investors in part because tenant subsidies help to shore up rent collections, Nuveen said. While a possible recession portends a downward trend for market-rate apartments, rents at affordable housing properties aren’t usually lowered during such periods, a Nuveen investor report notes. Nuveen’s latest acquisition consists largely of government subsidized buildings with a mix of housing vouchers and tax credits. Most units rent to tenants making 60% or less of the area median income, the company said. The seller is Omni Holding Company, a New York-based affordable housing operator co-founded by retired baseball player Mo Vaughn. Omni is selling nearly all of its affordable housing portfolio in the transaction, Nuveen said. TIAA manages retirement plans for more than 5 million active and retired employees across several fields. Nuveen’s assets under management total $1.1 trillion. Nuveen’s buy is the second super-sized affordable housing sale to happen recently. A division of Goldman Sachs, along with partners, last month spent nearly $1.2 billion to buy more than 10,000 affordable units in major Southern and Midwest cities. Some of the properties have expiring affordability agreements that Nuveen said it plans to extend. “We want to continue to hold those and preserve those,” said Pamela West, portfolio manager of impact investing in Nuveen’s Real Estate Impact Group. Nuveen will manage the Omni properties in its Impact Housing portfolio, a fund for longer-term holdings, the company said. Construction of new affordable housing, meanwhile, has been strained by rising interest rates. Some developers last fall said they were pausing plans to build until they could secure cheaper financing.