Citi, Highridge, and Costa Form National Affordable Housing Venture

Citi, Highridge Partners, and low-income housing tax credit (LIHTC) industry leader Michael Costa have agreed to form a new company operating as Highridge Costa Housing Partners (HCHP) to own general partnership interests in and manage an existing $3.4 billion LIHTC portfolio of 275 affordable, multifamily housing communities that were built over the last 15 years and to pursue new opportunities.

Citi is contributing a previously foreclosed portfolio of which Costa was a partner. Highridge Partners, a privately held real estate investment company, is providing required new equity capital, global capital markets relationships, and a strategic financial management perspective. Costa brings his experience in tax credit syndication.

The Highridge Costa portfolio of 275 properties is comprised of family and senior apartment communities, housing 80,000 residents in 34 states and Puerto Rico; almost 50 percent of the properties are in California. All were developed using LIHTCs.

“These are attractive, well-managed properties that were part of a company that was the victim of a broken capital structure,” said John Long, founder of Highridge. During the time of Citi’s ownership, Costa continued to manage the properties ensuring they were fully occupied and properly maintained, allowing a seamless transition to Highridge Costa Housing Partners.

In addition to Citi, HCHP expects to partner with other financial institutions with which it has long-standing relationships, including: Bank of America, J.P. Morgan Chase, and Wells Fargo, to name a few.

Highridge Costa, through a separate operating company, will continue to develop new, affordable communities under the tax credit program, primarily in California. The company already has seven projects in various stages of pre-development and will submit applications for several of them in the October tax credit allocation round. More immediately, HCHP expects to break ground within the next 30 days on a 62-unit multifamily community in Hesperia, Calif.