29 Jan HPET, in Partnership with Mercy, sells 2000 Illinois
Confirmation that the business plan and the mission are working
HPET is pleased to announce that it has sold 2000 Illinois, a 128-unit mid-rise property in Aurora, Illinois. The sale, which closed at the end of 2019, marked the first third party sale of an HPET asset since the REIT was formed nearly a decade ago.
2000 Illinois is a mixed-use property acquired in 2013. When HPET/Mercy acquired the property, it was awarded a state donation tax credit from the Illinois Housing Development Authority (“IHDA”) that required 32 units restricted to households earning no more than 60% of AMI. To be eligible for these tax credits the partnership agreed to restrict rents for at least 25% of the units to tenants earning no more than 60% of the area median income for a period of at least 10 years. This enhanced affordability has made a real difference for residents in the property, where rents have been between $750 and $1,100 per month.
“HPET was founded on the idea that we can work with our top class not for profits throughout the country and make a difference for our residents. 2000 Illinois demonstrates that we are succeeding in doing exactly this,” said Anne McCulloch, President & CEO of HPET.
Added Daniel Cunningham, HPET’s Chief Investment Officer, “our target return for investors has been an Internal Rate of Return (“IRR”) in the high single digits. The IRR on 2000 Illinois was at the higher end of this range and means we now have returned capital to the REIT to pursue additional preservation opportunities as part of its overall business strategy.”
Mercy Housing was the investor partner as well as the property manager for 2000 Illinois. Steve Spears, CFO for Mercy (and a Board Member of HPET), said “we were thrilled at the opportunity to invest in 20000 Illinois in 2013. Selling it at the end of the year was appropriate timing, given that we had held it for nearly seven years and know that we invested a lot into this property in the pursuit of stability and preservation. Clearly, this was a success—both for Mercy as well as for HPET.”