Boston Financial Investment Management is poised to have a big year.
At the end of 2020, the firm completed its acquisition of Boston Capital’s low-income housing tax credit (LIHTC) business. With that move, Boston Financial’s portfolio nearly doubled, with its equity under management jumping from $7.7 billion to $15 billion. The firm now manages more than 2,300 underlying assets and 190 LIHTC funds.
The acquisition of its friendly rival made sense on two important levels, according to Greg Voyentzie, CEO of Boston Financial. “We have a very sophisticated asset management platform, and we manage that to an institutional level,” he says. “The addition of the new assets to that platform allowed us to scale in size. That scaling allowed us to gain cost efficiencies. Those assets are very well underwritten and similar in process to our underwriting, so we were very comfortable with the properties and the funds.”
The second reason is Boston Financial, which celebrated its 50th year in 2019, is planning to grow significantly.
“This addition offered us a unique opportunity for Boston Financial to add a deep bench of talent that will allow us to better serve our clients and have a greater impact on the development of affordable housing and the communities that we serve,” Voyentzie says.
About 60 people made the move from Boston Capital to Boston Financial, with the largest percentage of employees working in the production arena, including originators and underwriters.
Both firms have a long history in the LIHTC business, but surprisingly there wasn’t that much overlap when it came to investors and developers. As a result, the new team members have brought with them relationships on both sides to help in Boston Financial’s growth, according to Voyentzie, who has been with the company since 1999 and CEO since 2018.
The firm tops the NMHC’s list of leading LIHTC syndicators this year after it was No. 8 in 2020.
Looking at the year ahead, Voyentzie has set a goal of raising and deploying $1 billion in LIHTC capital in 2021.
Boston Financial leaders also want to push deeper into the preservation and workforce housing space.
In recent years, the firm has invested approximately $51 million of its own balance sheet into the preservation of affordable housing properties as they hit year 15 of their compliance periods. Boston Financial is planning to take the next step and raise investor money to continue that work in a more meaningful way.
The company is also looking to create new opportunities to invest in housing that serves residents who earn more than what’s allowed to qualify for housing credit properties but still struggle to pay market rents.
Like every other sector, the affordable housing industry will be working to reset from the COVID-19 pandemic that shut down offices and slowed down business last year. Fortunately, LIHTC developments fared better than most other real estate asset classes.
Overall, occupancies remained stable, rent collections continued, and underwriting held together, says Voyentzie, adding there’s reason for continued optimism as vaccinations occur, a federal stimulus package has been approved, and housing credits remain a key vehicle for investors. “We’re rolling into this year better informed and definitely more positive,” he says.
The affordable housing industry has also shown it can weather different challenges over the past 35 years, whether it is economic downturns or program changes.
“I’m continually impressed by the resiliency of the LIHTC program and the dedication of our investors and developers,” Voyentzie says. “They’ve really stepped up during trying times and ensured continuity in the program.”
|RANK + COMPANY
|UNITS SYNDICATED 2021/2020
|1. Boston Financial Investment Management, LP
|2. Raymond James Tax Credit Funds, Inc.
|St. Petersburg, FL
|3. PNC Real Estate
|4. National Equity Fund, Inc.
|5. Enterprise Community Investment
|Charles R. Werhane
|6. Alliant Capital
|Woodland Hills, CA
|7. The Richman Group Affordable Housing Corporation
|Richard Paul Richman
|8. AIG Affordable Housing Partners
|Los Angeles, CA
|9. Hunt Capital Partners
|10. WNC & Associates
|Wilfred N. Cooper, Jr.