COLLIERS MINNESOTA

NOAH Impact Fund

January 8, 2018

 

Having just opened its doors in June of this year, the Naturally Occurring Affordable Housing Impact Fund (NOAH) has lived up to its name and has already had a major impact on the multifamily investment landscape. The fund’s mission, “to preserve 2,000 unsubsidized, affordable rental apartment homes in the Twin Cities metropolitan area for the benefit of low- and moderate-income working families, individuals and seniors” is well on its way to achieving that goal.


The NOAH Impact Fund was created to combat the rising popularity of value-add development and its impact on affordable rents. In recent years, many of the aging and affordable housing options around the Twin Cities have been purchased by value-add strategists and redeveloped to cater to a higher income tenant base. This results in the displacement of any residents who are unable to afford the higher rents. The NOAH Impact Fund seeks to curb this trend by helping buyers interested in maintaining affordability, the ability to compete on price with the value-add strategists.


To accomplish this task, the Fund will partner with the acquiring party and fund up to 90% of the equity against a 70% first mortgage. This gives a buyer significant leverage advantages to help fund a transaction without having to secure a conventional down payment. Refer to the proposed capital stack graph to see how partnering with the NOAH Impact Fund allows investors to purchase a $10 million-dollar property with only $300,000 down.


The NOAH Impact Fund targets 60+ unit multifamily properties, in high demand rental locations, that are considered at risk of displacing tenants through rising rents. The fund has already played a vital role in several large acquisitions in the Twin Cities that are outlined below.

 

Having just opened its doors in June of this year, the Naturally Occurring Affordable Housing Impact Fund (NOAH) has lived up to its name and has already had a major impact on the multifamily investment landscape. The fund’s mission, “to preserve 2,000 unsubsidized, affordable rental apartment homes in the Twin Cities metropolitan area for the benefit of low- and moderate-income working families, individuals and seniors” is well on its way to achieving that goal.


The NOAH Impact Fund was created to combat the rising popularity of value-add development and its impact on affordable rents. In recent years, many of the aging and affordable housing options around the Twin Cities have been purchased by value-add strategists and redeveloped to cater to a higher income tenant base. This results in the displacement of any residents who are unable to afford the higher rents. The NOAH Impact Fund seeks to curb this trend by helping buyers interested in maintaining affordability, the ability to compete on price with the value-add strategists.


To accomplish this task, the Fund will partner with the acquiring party and fund up to 90% of the equity against a 70% first mortgage. This gives a buyer significant leverage advantages to help fund a transaction without having to secure a conventional down payment. Refer to the proposed capital stack graph to see how partnering with the NOAH Impact Fund allows investors to purchase a $10 million-dollar property with only $300,000 down.


The NOAH Impact Fund targets 60+ unit multifamily properties, in high demand rental locations, that are considered at risk of displacing tenants through rising rents. The fund has already played a vital role in several large acquisitions in the Twin Cities that are outlined below.

 

See Full Multifamily Market Report

 

Brady DeVore

Associate

Colliers International Minneapolis - St. Paul

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Defined by our spirit of enterprise, Colliers Minnesota is a leading, full-service commercial real estate services organization.  We are dedicated to providing clients with innovative real estate solutions and the most comprehensive market knowledge. We specialize in understanding our client’s unique business needs in every commercial property type.

Headquartered in the Twin Cities with regional offices in Minnetonka, Minneapolis and Shoreview, Minnesota, Colliers International | Minneapolis-St. Paul consists of more than 240 local professionals. Our expertise extends into every aspect of today’s commercial real estate business including architecture, brokerage, facility services, investment sales, project management and property management.

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