Newmark Secures $400 Million Freddie Mac Tenant Advancement Commitment for Comunidad Partners

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On January 25, 2023, Newmark secured a $400 million Tenant Advancement Commitment (TAC) for Comunidad Partners, a firm focused on affordable housing in diverse U.S. communities. TACs offer competitive financing from Freddie Mac, aimed at maintaining rent affordability. This agreement enables Comunidad Partners to restrict rent for select units, benefiting families earning at or below 80% of the Area Median Income (AMI). The first transaction involves a $21 million loan for the renovation of Villas at Shadow Oaks in Austin, Texas, which consists of 176 units, all rented at or below 80% AMI. The initiative aims to preserve affordability for 4,000 to 5,000 housing units.

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• Secured a $400 million Tenant Advancement Commitment to enhance affordable housing.
• First transaction includes a $21 million loan for the renovation of a fully rented community in Austin, Texas.

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• None.

AUSTIN, Texas, Jan. 25, 2023 /PRNewswire/ -- Newmark announces it has secured a $400 million Tenant Advancement Commitment (TAC) on behalf of borrower Comunidad Partners, a vertically integrated real estate investment firm specializing in workforce and affordable housing in culturally diverse communities throughout the U.S. Newmark Vice Chairman and Head of Workforce Housing Anthony Tarter represented the borrower in the transaction.

TACs are a contemporary form of competitive financing offered by Freddie Mac to private-sector operators who agree to self-impose rent restrictions, helping to preserve or create affordability at properties that do not have regulatory rent or income restrictions. As part of this innovative program, multifamily borrowers also provide resident social impact services at each property.

"We are honored to continue our mission of creating and preserving affordability in multifamily housing through our partnership with Freddie Mac. This effort aims to ensure working families are able to live in high-quality homes that will provide housing stability and improve access to opportunities that enrich their lives," said Antonio Marquez, Founder and Managing Partner of Comunidad Partners. "Our first commitment with Freddie Mac in 2021 enabled thousands of families to secure housing at affordable rents. Additionally, the commitment provided access to social impact programs that improve positive social and economic determinants of success. Working alongside Newmark on this TAC will be a value-add to our investment strategy as we grow our social impact multifamily initiatives over the next year and beyond."

Comunidad Partners has agreed to self-restrict rent prices for a portion of homes in communities across its portfolio in exchange for advantageous loan terms and favorable pricing. The rent protections in place support FHFA's mission of preserving affordability for its newly defined category of workforce housing, with units set aside for those earning at or below 80% of the Area Median Income (AMI), at or below 60% of the AMI or a mixed-income combination of the two. These rent protections will be preserved throughout the loan term. Additionally, resident social impact services will be provided for each community, including virtual healthcare services, afterschool tutoring, access to jobs and economic advancement opportunities that can lead to improved household income and other equity/wealth-building programs for residents. Comunidad Partners expects to create and preserve affordability in 4,000 to 5,000 units in 20 to 25 communities through this new TAC.        

Newmark and Comunidad Partners have arranged for the first transaction under the TAC to be a $21 million loan to finance and renovate Villas at Shadow Oaks in Austin, Texas. The 176-unit community is 100% rented at or below 80% AMI, and 50% of the units are rented at or below 60% AMI. Veritas Impact Partners, a tenant-focused non-profit, will implement resident social impact programs around economic advancement, health and wellness, education, equity and inclusion.

"Addressing the need for affordable housing starts with investment in the working family, which is just what this partnership between Comunidad Partners and Freddie Mac allows for," said Tarter. "Keeping rental prices within families' budgets while providing quality units, amenities and on-site services is a model that makes economic sense and improves the quality of families' lives and their community at large."

In 2021, Comunidad Partners was named Freddie Mac's Inaugural Impact Sponsor of the Year after partnering with the lender for a $300 million Master Financing Commitment (MFC) that year. 

Newmark's Workforce Housing group delivers debt, equity and structured finance services to owners of multifamily properties in which property residents earn 60% to 100% of AMI. The upper end of that range is extended to 120% of AMI in higher-cost metros. Tarter has assisted in the development of social impact programs and workforce housing loan products with Freddie Mac and Fannie Mae. He is also on the Board of Veritas Impact Partners and serves as the Capital Markets Co-Lead for the National Multifamily Housing Council's Workforce Housing Committee.

About Comunidad Partners
Comunidad Partners is a dynamic, vertically-integrated real estate investment firm specializing in workforce and affordable housing in culturally diverse communities throughout the United States. The firm is proudly 100% minority and women-owned and heavily focuses its investments activities on positively impacting communities through its ESG practices and its corporate culture of diversity, equity, & inclusion. The firm has been a market leader in ESG for over a decade and received national recognition on its ESG practices from Fannie Mae, SAHF/CORES, and was named Freddie Mac's Impact Sponsor of the Year in 2021. Core to its investment strategy is creating culturally-relevant, inclusive communities that are tailored to the specific needs and wants of the diverse residents living at the communities it serves. For more information, please visit comunidadpartners.com.

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of approximately $3.1 billion for the twelve months ending September 30, 2022. Newmark's company-owned offices, together with its business partners, operate from approximately 180 offices with nearly 6,700 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

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SOURCE Newmark Group, Inc.

FAQ

What is the purpose of the $400 million Tenant Advancement Commitment secured by Newmark on January 25, 2023?

The TAC aims to provide competitive financing to maintain rent affordability for working families in multifamily housing.

How many housing units are expected to be preserved through the new Tenant Advancement Commitment by Comunidad Partners?

Comunidad Partners expects to create and preserve affordability in 4,000 to 5,000 housing units across various communities.

What is the significance of the $21 million loan arranged by Newmark for the Villas at Shadow Oaks?

The loan is intended for financing and renovating a community of 176 units in Austin, Texas, all rented at or below 80% of the Area Median Income.

How do Tenant Advancement Commitments benefit multifamily borrowers?

TACs allow borrowers to self-impose rent restrictions in exchange for favorable loan terms, aiding in the preservation of affordable housing.