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Blackstone forms new company in affordable apartments

(Bloomberg) — Blackstone Inc. is creating a company to manage investments in affordable housing as the firm builds up an operation to support a new strategic push.

The investment giant is hiring veteran lender Alice Carr to lead a new company called April Housing. According to a statement Wednesday, Carr, JPMorgan Chase & Co.’s former head of community development banking, will oversee an initial portfolio of 90,000 units.

While Blackstone has long been a major owner of apartment properties, it has recently turned its attention to the part of the US housing market where rents are regulated by the government. In a major deal, the firm acquired approximately 80,000 apartments from insurer American International Group Inc., operating under the federal low-income housing tax credit program.

Nearly all units in April Housing’s initial portfolio are regulated under the program, which provides investors with a financial incentive to limit their ability to raise rents. According to the statement, apartments will remain rent-restricted for an average of 20 years, and Blackstone plans to keep properties affordable over the long term.

Blackstone’s nontraded real estate investment trust, known as Breit, has been the focus of the firm’s affordable housing efforts. A typical private equity fund is expected to return capital to investors after a specified period of time. BREIT, a fundraising juggernaut, provides Blackstone with permanent capital, allowing it to hold assets for long periods.

The firm named it April because it means “opening up” and “aligns with Blackstone’s goal of opening up new avenues to preserve and expand its supply of affordable housing.” According to the statement, April Housing plans to spend more than $500 million over the next decade to improve its apartment communities.

© 2022 Bloomberg LP

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