SoLa Impact just landed upwards of $100 million in financing backed by more than a dozen affordable apartment buildings across Los Angeles County.
The private equity-backed development firm closed a $105 million financing package tied to 14 properties in the county, the Los Angeles Business Journal reported.
SoLa Impact plans to use the funds to recapitalize ground-up construction projects totaling 465 units, more than half of which are designated for tenants earning 60 percent or less of the area median income. In Los Angeles County, that works out to an annual income of roughly $45,390 or less for a one-person household, or $64,680 for a household of four. With the money in hand, SoLa will be able to continue delivering new housing while “creating more attractive risk-adjusted returns for investors,” company CEO Martin Muoto said in a statement.
Cap Pointe Advisors and Greystone Capital Advisors were co-advisors on the deal. The bond deal serves as an example of “institutional demand for high-quality, affordable housing assets,” Cap Pointe Advisors founder Eliav Dan said of the transaction.
The new funding is the first publicly rated, federally taxable and state tax-exempt municipal bond financing secured by Section 8 affordable housing assets, Dan said. The money is part of the SoLa Impact Opportunity Zone Fund, which uses private capital and the federal Opportunity Zone tax incentive to develop, preserve and renovate affordable and mixed-use housing in Los Angeles neighborhoods like Historic South-Central and Watts and neighboring cities like Compton.
The financing lands as SoLa Impact faces pushback from residents and business owners in El Sereno over its proposed 111-unit housing project at the of South Huntington Drive and Portola Avenue, KABC reported. Community members held a protest for the multifamily development, poised to rise on a vacant lot, which would not include parking — an issue that locals say will negatively affect the area.
“It’s just sad to think that this monstrosity is going to be built with zero parking. I think that really impacts values in the neighborhood and we should all be concerned about that,” one resident said during a demonstration last week.
The funding also comes after SoLa Impact faced a probe by the U.S. Securities and Exchange Commission over concerns of financial impropriety behind the scenes, The Real Deal reported last year. The SEC investigated potential conflicts of interest and intercompany transactions, scrutinizing whether financial arrangements inappropriately benefited the founders rather than the investors to the tune of $96 million. The SEC declined to comment on the existence of any such investigation at the time.
— Chris Malone Méndez
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