CIM Group is the latest real estate investment firm to go big on affordable housing as rents rise and homeownership slips further out of reach for many U.S. residents.
The Los Angeles-based firm has teamed up with Bryant Group Ventures, led by entrepreneur and Operation HOPE founder John Hope Bryant, to form CIM-BGV Impact Ventures. The venture's first fund, called CIM-BGV Affordable Housing Impact Fund I, has raised more than $250 million with plans to grow to $1 billion within a year.
The fund, backed by Flagstar Bank and Truist Bank, plans to target markets where affordability has eroded and where CIM already has a footprint, including Southern California, Georgia, Washington D.C., New York and Florida. It aims to acquire existing affordable housing and develop new multifamily projects with a focus on long-term affordability.
“Too many families across the country are struggling to find stable, affordable housing," said a statement from Flagstar Bank President and Chief Executive Joseph Otting.
Institutional interest in affordable housing is surging, with companies like ManuLife, BH Properties, Blackstone and Nuveen all allocating funds to invest in the sector as U.S. home prices have jumped more than 50% since the pandemic.
Affordable rentals — typically reserved for households earning 60% to 80% of area median income — are increasingly scarce. The National Low Income Housing Coalition estimates the U.S. is short 7.1 million affordable homes for extremely low-income renters, with only 35 affordable units available for every 100 households in need.
CIM’s affordable pivot
CIM Group said Bryant's "mission-driven" expertise will complement the investor's experience in real estate, credit, and infrastructure. Over the past 30 years, Bryant-led organizations have helped direct more than $4 billion to underserved communities, according to the firms.
CIM Group has invested in multifamily housing since its founding in 1994 but hasn’t focused heavily on affordability until now. In 2022, it acquired the only Class A apartment complex in Inglewood, a city in Los Angeles County changing with an influx of development and rising rents.
In 2023, the company announced plans to redevelop a vacant former church site in West Adams into 168 apartments, including 17 affordable units in order to qualify for city density bonus programs.
Bryant Group Ventures, meanwhile, has long partnered with institutions to scale housing with community services. John Hope Bryant founded Operation HOPE after the 1992 Los Angeles riots to bring financial literacy to underserved communities. In 2017, he launched The Promise Homes Co., a for-profit social enterprise focused on affordable single-family rentals.
With $130 million in initial funding, Promise Homes quickly acquired a $22 million portfolio of Atlanta-area homes, becoming one of the largest minority-controlled owners of institutional-quality single-family rentals in the U.S. Bryant’s goal: Provide quality housing at affordable prices for working families, while offering free financial coaching through Operation HOPE.
This blend of housing and financial literacy helps renters improve credit, save and work toward homeownership, according to Bryant.
Follow the money
Big money is flowing into affordable housing — and not just from government programs. Institutional investors are jumping in with billion-dollar bets, hoping to tackle the housing crisis while earning steady returns.
Take Manulife Investment Management and TruAmerica Multifamily. They teamed up to launch Anchor Point Residential, a joint venture aiming to acquire and preserve $1 billion of affordable rentals across the country. Standard Communities made waves last fall with a deal to buy a $1 billion portfolio of 60 affordable apartment complexes spread across four states.
In September, Guardian Real Estate Services and National Equity Fund shelled out $444 million for 13 properties totaling 2,740 units in Portland and Albuquerque.
Los Angeles-based BH Properties is also getting in on the action. It launched Haven Housing, a platform focused on older income-restricted buildings and workforce housing, starting with 2,500 units and plans to scale fast.
Blackstone in recent years has been spending billions on affordable rentals, while Nuveen and Related Fund Management are financing thousands of affordable units from Queens to Texas.