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Transactions - JUNE 16, 2016

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Starwood buys LIHTC portfolio for $564m

by Andrea Waitrovich

Starwood Property Trust has acquired a 31-property Low Income Housing Tax Credit portfolio, totaling 8,498 residential units across Florida, for $563.5 million. The seller was The Wilson Co., and HFF represented the seller.

Heavily concentrated in the Orlando and Tampa markets, the portfolio was developed between 1995 and 2004 under Section 42 of the Internal Revenue Code. Under this code, developers receive LIHTC to offset development costs. In return, LIHTC properties are encumbered with long-term rent and income restrictions. On average, maximum allowable rents across the portfolio are approximately $350 below prevailing rents at nearby market-rate communities. Tremendous demand for affordable housing across the portfolio contributed to an average portfolio occupancy exceeding 97 percent at the time of sale.

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