Behind The Multifamily Numbers: Affordable Housing In New York City Attracts Big Money


Affordable housing accounted for approximately 43% of New York City’s $3.91 billion in multifamily sales in 2Q 2023, according to Ariel Property Advisors’ Q2 2023 Multifamily Quarter in Review report.

Major mission-driven investors including Nuveen, The Vistria Group, Tredway and Asland Capital Partners in association with Goldman Sachs made sizable affordable housing acquisitions across the boroughs in the second quarter, which contributed to the significant boost in dollar volume. In addition to preserving and producing affordable housing, investments in this asset class are attractive because they offer access to dedicated capital, value creation opportunities, property tax incentives, agency financing and scale, all of which have contributed to their substantial growth.

Mission-Driven Investors Step Up

Nuveen is one of the nation’s largest institutional managers of affordable housing and recently made a strategic decision to buy in New York City. Nuveen oversees more than $1.1 trillion in assets of which $6.4 billion is comprised of 161 affordable housing investments with approximately 32,000 units that primarily serve low-income residents earning 60% of area median income (AMI) or less.

Nuveen’s partial-interest acquisition of an affordable portfolio from Omni Holding Company for an estimated $956 million was the largest multifamily transaction in New York City in the second quarter and accounted for nearly 60% of the dollar volume invested in affordable housing during this period. Nuveen Real Estate announced that the deal involved 72 properties (tax lot) distributed across 5,900 units. The majority of these units were located in the Bronx, while the remainder of units were in Brooklyn, Queens and Northern Manhattan. “With the Omni transaction, we can develop and manage properties across the U.S. and achieve the desired outcomes for residents and investors.”

The Vistria Group,

a private investment firm, ventured into New York City’s affordable housing market for the first time in June by making a $174 million investment in a portfolio with 1,290 units across five rent stabilized buildings; four in the Bronx and one in Northern Manhattan. The transaction was financed through a Freddie Mac originated loan by Keybank.Eleonora Bershadskaya, Principal, Real Estate, for the Vistria Group, who was a panelist at Ariel Property Advisors’ recent Coffee and Cap Rates event, said the acquisition was appealing because the buildings have undergone significant capital improvements over the last decade and they benefit from an Article 11 tax abatement, which will be in place for the next 30 years.

“One of the most important factors was the level of affordability that will persist for a long time across the portfolio, especially in the Bronx which has seen pretty significant rent growth in the last five years,” Bershadskaya said. “Also, there are development opportunities in the borough, so having a haven of affordability in that area was important to us both from an impact and financial perspective.”

The Vistria Group, which expanded its Healthcare, Knowledge & Learning Solutions, and Financial Services sector focus last year to include affordable, mixed-income and workforce multifamily housing nationwide, is taking a long-term view when acquiring affordable housing assets as it seeks to meet a double bottom line.

“First, it’s incredibly important for us to help address the affordable housing crisis in this country,” Bershadskaya said. “Second, financially it also makes sense because when we provide that level of affordability, we have a sticky renter base with low turnover and high occupancy, which translates into lower cost and better economics for the asset.”


, a prominent New York City-based affordable housing owner-operator-developer, partnered with Gilbane Development Company and ELH Mgmt in May to acquire the Sea Park Portfolio, an affordable housing portfolio comprised of three former Mitchell Lama elevator buildings with a total of 818 units and an 89,357 square foot parcel. Ariel Property Advisors arranged the $150 million ($156/SF) sale.One of the multifamily buildings in the Sea Park portfolio acquired by Tredway.

Tredway and its partners plan to embark on a multimillion-dollar rehabilitation of the entire Sea Park complex focused on quality-of-life improvements as well as strengthening its resiliency and improving the property’s energy efficiency. The 90 units will be allocated to formerly homeless people, while three apartments will be reserved for the superintendents. The team plans to build 250 units of affordable housing for seniors at the site. The investments we make will create a more vibrant, diverse, affordable and healthy community for thousands of New Yorkers that call Sea Park, and the greater Coney Island neighborhood, home. “

Asland, a real estate investment company specializing in mixed-use and multifamily investments, has partnered up with

Urban Asset Group

of Goldmans Sachs Asset Management for the launch of the Asland Sustainable Housing Fund. Ariel Property Advisors arranged the $45.2 million transaction. Ariel Property Advisors arranged the $45.2 million transaction.The Asland Sustainable Housing Fund acquired an affordable housing portfolio located in Upper Manhattan and the Bronx for $45.2 million.

Affordable Housing Drivers

The increased demand for affordable housing illustrates how mission-driven capital sources are increasingly drawn to this sector because of its strong underlying fundamentals and incentives which include:

Satisfying investors’ double bottom line of integrating financial success with social accountability.

Property tax incentives and in some cases subsidies.

Value-add opportunities in the way of increasing rents, specifically with vouchered tenants whose rents are tied to the U.S. Department of Housing and Urban Development (HUD) Fair Market Rent schedule for each unit size.

  • The ability to leverage agency lenders (Fannie Mae, Freddie Mac and HUD) and city programs offered by HPD, HDC is a distinct advantage considering the scrutiny regional banks are facing since Signature Bank closed earlier this year. As a result, financing has become challenging for some multifamily deals, especially for rent stabilized assets.
  • My partner Victor Sozio summed up the appeal of affordable housing this way, “Not only does affordable housing continue to attract capital for CRA (Community Reinvestment Act) purposes, capital that’s designated for affordable housing, but there are still tools to work with to add value while also achieving the objectives of the respective agencies that govern and restrict these properties.”
  • In contrast, rent stabilized buildings, which only accounted for 10% of the second quarter multifamily sales, are seeing the lowest pricing metrics in almost two decades because the Housing Stability and Tenant Protection Act (HSTPA) of 2019 eliminated the ability to adequately increase rents to cover rising expenses and the renovation of vacant units.
  • What to Expect

Recent legislation, coupled with a city-driven commitment to preserving affordability, has created significant investment opportunities in affordable housing, which will result in steady returns for investors and improved living conditions for low-income housing tenants. This is a trend that we expect to continue as long as investor demand for this sub-segment of multifamily housing remains strong.