Anne McCulloch, president and CEO of Housing Partnership Equity Trust (HPET), participated in a video interview during Nareit’s CEO Forum & Advocacy Day at The Hay-Adams hotel in Washington, D.C.
HPET is a social purpose REIT focused on safeguarding affordable housing. Investor interest in the asset class has changed over the years, McCulloch said. “More apartment owners are interested in this asset class, but we also see many more investors who want to have impact with their investment dollars.”
When speaking with potential investors, HPET highlights that it offers a strong risk-adjusted return while ensuring that local communities have housing that serves the full range of working households, McCulloch said.
Turning to supply issues, McCulloch pointed out that half of all apartment supply today was built before 1980, and more of that supply is on the affordable side. “That’s the good news. The bad news is that we’re losing about 75,000 to 125,000 units a year,” she said.
McCulloch explained that ownership of class-B and class-C assets has historically been very fragmented, making it harder to assemble large portfolios. “For us, that’s a competitive advantage as we have partnerships with strong regional nonprofit housing owner-operators,” McCulloch said.
McCulloch also highlighted HPET’s purchase last year of a 105-unit property south of Oakland, California. The purchase, made in partnership with Eden Housing, a California-based nonprofit, embodies HPET’s social purpose mission, she noted.