Nuveen acquires Omni Holding’s real estate portfolio

Manhattan, NY Nuveen, the $1.1 trillion asset manager of TIAA, is acquiring a portfolio of assets from Omni Holding Company, a leading owner, operator and developer of affordable housing nationwide.

The Omni transaction positions Nuveen as one of the nation’s largest institutional managers of much-needed affordable housing. The deal increases the value of Nuveen’s affordable housing assets under management (AUM) to $6.4 billion and builds on the firm’s long history of responsible investing and stewardship in pursuit of attractive long-term returns for investors. Financial terms of the transaction were not disclosed.

The acquisition of Omni also expands Nuveen’s scope in affordable housing as the firm continues to preserve existing affordable housing units and protect at-risk units from market-rate conversion so residents can remain in their homes. Nearly all of Nuveen’s impact housing portfolio serves low-income residents earning 60% of area median income (AMI) or less.

“The acquisition strongly advances our ability to promote greater financial inclusivity, and health and wellness in communities that have lacked meaningful and lasting investment,” said Nadir Settles, global head of impact investing at Nuveen Real Estate. “Our strong commitment to affordable housing — and the communities where we are operating — is also a strong commitment to our clients, who are long-term supporters of this strategy.”

Nuveen is managing this newly acquired portfolio of assets for the TIAA General Account (GA) and for the benefit of retirement plan participants.

Affordable housing is an important part of the GA’s impact investing strategy and is well suited to the GA’s diversified portfolio, which is built to deliver predictable returns over the long term.

Founded in 2004, Omni has acquired, rehabilitated or built 94 projects in the U.S. with more than 19,000 affordable housing units. The Omni portfolio is largely concentrated in the New York metro area, with more than 10,000 units located in the Bronx, Brooklyn, Queens, Manhattan, Long Island and Newark, N.J.

“Our goal is to meaningfully invest in the preservation and expansion of high-quality affordable housing to support the well-being of rent-burdened residents within local communities,” said Pamela West, senior portfolio manager of impact investing at Nuveen Real Estate. 

“With the Omni transaction, we can develop and manage properties across the U.S. and achieve the desired outcomes for residents and investors.”

Affordable Housing, an Urgent Need Nationwide
With extensive experience investing in U.S. affordable housing dating back to 1992, Nuveen’s transaction with Omni comes amid a shortage of quality affordable housing and deepens the firm’s dedication to advancing change through impact investing.  

The lack of affordable housing is a major economic and societal challenge, particularly as rent inflation outpaces income growth for mid- to low-income earners and the housing supply deficit continues into its second decade. Nearly half of U.S. renters are rent-burdened, meaning they are paying more than 30% of their income toward rent. Within this rent-burdened demographic, one in four renters are severely rent-burdened, meaning they pay more than 50% of their income toward rent.

“Demand for more affordable housing is intensifying nationwide, and investors increasingly are attuned to emerging opportunities to invest in housing that benefits society and also produces long-term positive and predictable performance,” said West.

Transaction Structure
As part of the transaction, Nuveen will acquire Omni’s best-in-class affordable housing capabilities in development, construction, maintenance, safety-technology and corporate functions to create an enhanced, vertically integrated affordable housing asset management business for Nuveen.

Over the last decade, Nuveen has invested substantially in affordable housing on behalf of the TIAA GA and third-party clients. As a result of the transaction and pending approvals of other related acquisitions, the TIAA GA is expected to own 161 affordable housing investments with approximately 32,000 units across 24 states valued at $6.4 billion.

U.S. Impact Housing Fund
Nuveen Real Estate also plans to launch its U.S. Impact Housing Fund, a core-plus, open-end vehicle, later this quarter. The fund will focus on generating strong risk adjusted returns and building resilience among low-income communities in the U.S., primarily by investing in rent-subsidized, income-restricted, and Naturally Occurring Affordable Housing (NOAH) assets.  The combination of Omni’s best-in-class capabilities and the fund launch will bolster Nuveen’s position to deliver a market leading and scaled impact investment platform, providing deep value for investors.

Jones Lang LaSalle Securities, LLC, an affiliate of Jones Lang LaSalle Americas, Inc. advised Nuveen on the acquisition of Omni Holding Company. Omni Holding was advised by CBRE Affordable Housing in partnership with CBRE Capital Advisors, Inc. Paul Hastings LLP and Nixon Peabody LLP acted as transaction and regulatory counsel to Nuveen, respectively.