Profile: Choice Housing Investments
Choice Housing Investments (CHI) is a leading multi-family residential real estate investment firm that identifies, underwrites and invests in various types of real estate investments ranging from stabilized assets to value-add opportunities that require market repositioning. As a synergistic real estate finance company, CHI leverages its relationship with affiliate Vesta Corporation, a vertically integrated real estate firm with a successful track record over its nearly 40 year history.
In Q4 2019, Vesta acquired, and CHI invested in, six property acquisitions totaling 1,399 apartment units in the State of Texas. These properties had a total capitalization in excess of $104 MM, with $28.75 MM in equity. CHI, the sponsor, invested 10% of that amount. The portfolio is exceeding projections and for Q1 2020 performed at a gross annualized cash on cash return in excess of 12.5%.
CHI has opened Fund I to new investors and is currently raising $1.5 MM to add two properties to the investment portfolio. All investors (existing and new) will be invested in the original six properties and the two new, with the total portfolio consisting of eight properties and 1,600 apartment units in two states (New York and Texas).
Vesta’s current portfolio holdings include 55 properties with 9,500 apartment units in seven states, plus Washington, D.C., and is valued in excess of $525 million. To date, returns for exited transactions have resulted in 17.3% IRR and 17.33% weighted average cash on cash over the last five years. Importantly, many deals are sourced off market through relationships and the high barriers to entry of affordable housing create a great profit opportunity. The sector shows consistent high demand with 100 renters for every 55 units.
The firm’s primary focus is to invest in the acquisition of existing multifamily real estate properties and portfolios that meet the needs of households that earn at or below 60 percent of Area Median Income (AMI). In addition to Affordable Housing, the Fund will have the flexibility to invest in Workforce (80-120% AMI) and Class B / C multifamily properties with no existing affordability restrictions. CHI will provide first loss protection to all outside investors who will be protected up to 20 percent of their capital contribution. All members will receive a 7 percent preferred return and the remaining cash flow will be shared with 80 percent paid to all investors ratably based on their investment.
“Arthur Greenblatt and I founded Choice Housing Investments with the goal of leveraging our collective sixty years’ experience in the affordable housing/multi-family housing industry. Our strategy of acquiring properties that will benefit from Vesta’s integrated owner/manager structure has proven its ability to deliver consistent returns to our investors,” said CHI President Joshua Greenblatt.