Crown Holdings, Stern Resources Form $250M JV To Jump Into Workforce Housing
Crown Holdings Group and New York-based investor Stern Resources Inc. have formed a joint venture to invest $250M in workforce housing in Georgia and Texas, as well as resort and housing developments in Florida. The JV aims to capitalize on strong demand for workforce housing in these markets, all of which are growing.
Atlanta-based Crown, which has invested about $1B in the Southeast over the last decade, plans to put about 30% of the funds in developing workforce housing in the Atlanta MSA. In Texas, the company will initially focus on the Houston market.
According to the Urban Land Institute's definition, workforce housing is affordable to households earning 60% to 120% of the area median income. An alternate definition puts it as housing that costs no more than 30% to 40% of gross income.
The demand for workforce housing is leading investors to make acquisitions nationwide, and in expensive housing markets, municipalities themselves are taking steps to increase the amount of housing available to essential workers.
In metro Atlanta, New York investor Spaxel said on Wednesday that it is acquiring a 266-unit workforce housing property in Marietta, Georgia, for $45M.
“Hills at East Cobb is a tentpole transaction for Spaxel in the Southeast, representing what will be the first of many transactions in the region,” Spaxel Managing Partner Granit Gjonbalaj told Real Estate Weekly.
On Tuesday, private equity real estate firm Henley Investment Management, together with Tower 16 Capital Partners, announced the sale of three Las Vegas workforce housing communities totaling 1,165 units for $182M. The sellers had acquired the properties about two years ago as value-add plays.
"As a result of the renovations undertaken, we have seen higher demand for units, coinciding with growing rents, higher occupancy and stronger operating performance — a strategy that we have also successfully executed and continue to target in other U.S. markets," Henley North America Chief Investment Officer Garrett Solomon said in a statement.
The need for workforce housing in Snowmass, Colorado, is so strong that the village of Snowmass wants to develop more itself, with plans to build another 185 workforce units. The village already manages 300 rental units and oversees 175 deed-restricted units.
“We have this overwhelming demand for rental over ownership," Snowmass Housing Director Betsy Crum told the Aspen Daily News. "I think every time we have a unit for sale we get 28 applicants for every one unit. We have, you know, 100 people on our studio list. We have ... huge demand.”