The oversubscribed offering was underwritten by KeyBanc Capital Markets and marks the first time a nonprofit housing developer has tapped capital markets to sell construction bonds
SAN FRANCISCO (December 17, 2024) – BRIDGE Housing has raised $71.5 million in a pathbreaking bond offering to finance an affordable housing community in Portland, Oregon, becoming the first nonprofit housing provider to issue publicly offered tax-exempt bonds for the construction of a new development.
The unprecedented bond offering was underwritten and marketed by KeyBanc Capital Markets and was four times oversubscribed, reflecting strong investor confidence in BRIDGE, the leading nonprofit affordable housing developer on the West Coast. This type of tax-exempt bond has historically been used by rated government entities such as housing authorities, and the structure enabled BRIDGE to borrow construction funds at a below-market rate, saving the project $2.5 million.
BRIDGE Housing has an AA- credit rating from S&P Global Ratings, the highest among nonprofit developers, and has long been a capital markets pioneer. It was also the first nonprofit affordable housing provider to issue general obligation sustainability bonds, raising $100 million in 2020, and has forged creative partnerships with major Wall Street institutions.
The bond proceeds will fund the construction of hollywoodHUB, a 224-unit building that is one of the largest affordable housing developments in the Portland metropolitan area. The bond issue and upcoming groundbreaking on hollywoodHUB cap a year in which BRIDGE Housing has accelerated its work to create and preserve urgently needed housing for low-income families. In 2024 alone, the nonprofit grew its portfolio by 11.5% to 14,774 units, through development and acquisitions, and now has $4 billion in assets in California, Oregon, and Washington.
“We are constantly seeking innovative financing to spur sustainable growth and advance our urgent mission to provide affordable housing,” said BRIDGE Housing President and CEO Ken Lombard. “We are grateful to KeyBank for leading this pathbreaking bond sale, to our investors, and to our partners on this very important project.”
BRIDGE Housing is developing hollywoodHUB in collaboration with the Portland Housing Bureau and Tri-County Metropolitan Transportation District of Oregon (TriMet). Two-thirds of units will be affordable for households earning 60% of Area Median Income (AMI), and one-third will accommodate households earning up to 30% of AMI. HollywoodHUB will offer quality affordable housing in a high-demand neighborhood with retail, grocery stores, healthcare facilities, high-performing schools, a large park, and easy access to downtown Portland by light rail.
HollywoodHUB is a major transit-oriented development on land owned by TriMet. The 12-story residential tower will be built on the site of the Hollywood Transit Center, a hub served by three light-rail lines and three bus lines, which TriMet is modernizing to improve service, safety, and access for residents and commuters.
“As one of the nation’s leading affordable housing capital providers, KeyBank is delighted to support BRIDGE Housing by facilitating access to novel funding for hollywoodHUB,” said Sam Adams, managing director, KeyBanc Capital Markets Public Finance. “The strong demand for the construction bonds – from some of the biggest institutional investors – attests to the credibility BRIDGE Housing has earned from decades of financial stewardship and delivering on its mission to strengthen communities.”
The bond structure effectively lowered BRIDGE Housing’s borrowing costs to a fixed rate approximately 100 basis points, or one percentage point, below the federal government’s benchmark Secured Overnight Financing Rate.
In addition to underwriting the BRIDGE Housing bond issue, KeyBank Community Development Lending and Investment is providing nearly $62 million in Low Income Housing Tax Credit equity for hollywoodHUB and arranged permanent financing with an $18.5 million private placement loan.
Since 1983, BRIDGE Housing has been an innovative leader in affordable housing on the West Coast. With a focus on community development and comprehensive support services, BRIDGE Housing creates strong communities, improves lives, and delivers positive social impact for its more than 30,000 residents.
About BRIDGE Housing
BRIDGE Housing Corporation is a leading nonprofit developer, owner, and manager of high-quality affordable housing on the West Coast, with a mission to strengthen communities and improve lives. Founded in 1983, BRIDGE Housing has participated in the creation of more than 22,000 affordable homes in California, Oregon and Washington, with a total development cost of $5.8 billion. Its current portfolio totals more than 14,000 apartments that are home to more than 30,000 residents, with more than 10,000 additional units in the development and acquisition pipelines. For more information, visit www.bridgehousing.com.
About KeyBanc Capital Markets
KeyBanc Capital Markets is a leading corporate and investment bank providing capital markets and advisory solutions to dynamic companies capitalizing on opportunities in changing industries. Our deep industry expertise, broad capabilities and unique ideas are seamlessly delivered to companies across the Consumer & Retail, Diversified Industries, Healthcare, Industrial, Oil & Gas, Real Estate, Utilities, Power & Renewables, and Technology verticals. With over 800 professionals across a national platform, KeyBanc Capital Markets has more than $50 billion of capital committed to clients and an award-winning Equity Research team that provides coverage on nearly 600 publicly traded companies. Securities products and services are offered by KeyBanc Capital Markets Inc., member FINRA/SIPC, and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services, are offered by KeyBank N.A.