Citi Establishes Affordable Housing Preservation Program with Emerging Managers

Rhea-AI Summary

Citi has launched an investment program aimed at channeling $200 million to five Black-led investment managers, each receiving $40 million, to enhance workforce and affordable housing across the U.S. The initiative is part of Citi's Action for Racial Equity, which targets closing the racial wealth gap. This program supports the acquisition of multifamily housing for low to moderate-income individuals, promoting community development and economic mobility. Citi's goal is to commit $550 million toward these initiatives by the end of 2023, continuing its status as the largest affordable housing lender in the country.

Positive

• Launch of a $200 million investment program targeting affordable housing.
• Commitment to allocate $550 million for housing initiatives by the end of 2023.
• Partnerships with five experienced Black-led investment managers.
• Recognition as the largest affordable housing lender in the country.

Negative

• None.

Citi has established an investment program comprised of five investment vehicles that seeks to increase investment capital allocated to Black investment managers focused on preserving workforce and affordable housing across the country. The initiative is part of Citi’s Action for Racial Equity.

After soliciting applications and engaging with a number of industry participants, Citi and its independent advisory council have selected five Black-led managers who have each received a $40 million allocation to invest in and manage workforce and affordable housing in partnership with L+M Development Partners. They include:

• Dantes Community Partners
  Dantes Community Partners (DCP) is an investment management firm focused on acquiring existing cash flowing assets with an emphasis on preserving workforce and affordable housing assets across the MidAtlantic region. DCP has a track record of using creative financing structures and marshaling the financial capital to support development.

• Ginosko Development Company
  Ginosko Development Company is a multi-state affordable housing development company with over 19 years of experience in affordable housing development. Ginosko Development Company has created sophisticated financing strategies to amass a current affordable housing portfolio that expands throughout the Midwest.

• Laurel Street
  Laurel Street is a leading multifamily residential development company experienced in developing and preserving high-quality, mixed-income communities for working families and seniors. Headquartered in Charlotte, N.C., the company has a current portfolio of more than 3,600 units throughout the Southeast.

• RailField Partners
  RailField Partners is a real estate investment firm with deep institutional experience that specializes in the acquisition of multifamily assets in the Mid-Atlantic, Southeast and Texas.

• SG|T2
  SG|T2 is a joint venture between SG Companies (“SG”) and T2 Capital Management (“T2”). The two companies are thriving real estate investment firms that have partnered together on several successful multi-family projects and are currently targeting the following markets: Michigan, Ohio, Indiana, Illinois, Wisconsin, Kentucky and Tennessee.

The program will acquire multifamily housing primarily for the benefit of low to moderate income individuals and communities (including workforce, regulated and mixed-income housing) with a commitment to community development and engaging diverse professionals throughout the acquisition and ownership infrastructures.

“This initiative underscores our commitment to help close the racial wealth gap and increase economic mobility in the U.S.,” said Gina Nisbeth, Director, Citi Community Capital. “Increasing access to capital funding with clients who have the track record, expertise and cultural competency to identify and finance additional affordable housing units is essential to support stronger, more inclusive neighborhoods.”

“We are honored to collaborate with some of the country's most dynamic real estate investment firms through this important investment initiative,” said Ron Moelis, CEO and Founding Partner of L+M Development Partners. “We applaud Citi’s continued commitment to preserving high-quality affordable and workforce housing."

“Throughout our 19 years of existence, GDC has never had access to significant private equity capital that allows us to efficiently and expeditiously implement our multifamily affordable housing real estate strategies,” said Amin Irving, President and CEO, Ginosko Development Company. “Citi’s Emerging Manager initiative is an enormous step in healing the unspoken pains of being a Black-owned and led real estate developer.”

According to a Citi GPS report, if the key racial gaps for Black Americans in wages, housing, education and investment were closed today, up to an estimated $5 trillion could be added to U.S. GDP over the next five years. Citi’s Action for Racial Equity, announced in September 2020, represents more than $1 billion in strategic initiatives to help close the racial wealth gap and increase economic mobility in the United States. The investment program announced today marks meaningful progress on the Action for Racial Equity goal of committing $550 million to support homeownership for people of color and affordable housing by minority developers through the end of 2023.

Earlier this year, Citi was recognized as the largest affordable housing lender in the Country, according to Affordable Housing Finance (AHF) Magazine’s annual survey of affordable housing lenders. This marks the eleventh consecutive year that Citi has earned this distinction.

For more information on Action for Racial Equity, and the ways in which we’re expanding and deepening our strategic initiatives, visit: citigroup.com/racialequity.

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at http://www.citigroup.com | Twitter: @Citi | YouTube: http://www.youtube.com/citi | Blog: http://blog.citigroup.com/| Facebook: http://www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210527005254/en/

FAQ

What is Citi's new investment program focused on?

Citi's new investment program aims to allocate $200 million to Black-led investment managers for workforce and affordable housing development.

How much funding has each Black-led manager received?

Each of the five selected Black-led managers has received $40 million from Citi's investment program.

What is the goal of Citi's Action for Racial Equity?

The goal is to close the racial wealth gap and increase economic mobility in the U.S. with a commitment of $550 million by the end of 2023.

How does Citi plan to support low to moderate income individuals?

Citi's investment program will focus on acquiring multifamily housing to benefit low to moderate income individuals and communities.

How is Citi recognized in the affordable housing sector?

Citi has been recognized as the largest affordable housing lender in the country for eleven consecutive years.