IRVINE, CA—WNC has closed a $94.2-million California institutional LIHTC fund that will acquire 972 affordable-housing units in six properties throughout California and rehabilitate them. The national investor in real estate and community-development initiatives closed WNC Institutional Tax Credit Fund 10 California Series 16, L.P. (CA 16).
The properties to be acquired and rehabilitated are located in both suburban and urban areas of California, within the cities of Antelope, Los Angeles, National City, Sacramento and San Marcos.
WNC's EVP and COO Michael Gaber said in a prepared statement that this is the 21st fund WNC has closed that focuses on the development or rehabilitation of quality affordable housing in California. “With a severe supply/demand imbalance for affordable-housing throughout the US, it is vitally important that we do all that we can to rehabilitate and maintain existing affordable housing to provide a safe, comfortable home to families in the state.”
Graber tells GlobeSt.com that rehabilitating affordable-housing properties is especially crucial in California, where the demand for affordable apartments is consistently greater than what's available. “Many areas within California also continue to experience an increase in rents and a decrease in vacancies, leaving few options to families who cannot afford these rising costs. By renovating affordable housing communities, not only is the existing stock protected and families are not displaced, but also, residents are provided a modernized place that they deserve to call home.”
According to Christine Cormier, SVP of investor relations for the firm, WNC was able to close the fund within two months of the enactment of tax reform, despite the “difficult environment reform has created.” She added that WNC has “overcome the structural challenges and continues to work closely with our development and investment partners to ensure that families in need will receive the quality affordable-housing units they deserve.”
CA 16 includes eight Community Reinvestment Act-qualified institutional investors, three of which are first-time investors with WNC.
As GlobeSt.com recently reported, Anand Kannan, president of Community Preservation Partners, whose parent company is WNC, told us that affordable-housing investment makes sense even in a volatile economic environment. “Affordable-housing investments tend to do well in most economies, but especially when there is volatility like we've seen in the past year. Drastically shifting markets come with added risks, even when the mood is bullish; however, affordable housing has no such problems as an asset class.”
Annan added that long-term vacancies are unlikely, and there are simply too few units available in the country to meet the inelastic demand for accessible homes for our lower-income residents. “As an investor, you can't beat that kind of stability.
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