Annaly Capital Management Inc. and Capital Impact Partners recently revealed the launch of a new joint venture with a $25 million commitment to support affordable housing and other community development projects in Washington, D.C. The venture represents Annaly’s second impact investing partnership since 2017 with Capital Impact, a national mission-driven non-profit community development financial institution.
As an innovative structure in the mortgage REIT sector, the venture provides direct financing for socially responsible projects in low-income communities while simultaneously enabling Capital Impact to further expand its efforts in key cities like Washington, D.C. Annaly’s commitment will support Capital Impact’s management of the D.C. Affordable Housing Preservation Fund in partnership with the city’s Department of Housing and Community Development.
The Venture is closely aligned with Annaly’s focus on housing finance given Capital Impact’s work in preserving affordable housing. Various community development projects will also benefit from the Venture within the D.C. area. For example, the Venture will enable several charter schools to finance expansion into new grades, increase student enrollment and improve current operations.
“We are excited to announce our second social impact venture with Capital Impact Partners. Our commitment is aimed at improving economic opportunity while helping to preserve and protect affordable housing and foster education in Washington, D.C.” said Kevin Keyes, Chairman, Chief Executive Officer and President of Annaly. “Housing and educational opportunity are fundamental to the economic health of individuals and communities. We are proud of this Venture and look forward to continuing to deliver long-term benefits and diversified returns to our shareholders through our social impact investment strategies.”
“Supporting the kinds of high-impact projects that build equity and inclusion and help fuel inclusive growth requires a variety of dedicated partners. That is why we are proud to partner once again with Annaly Capital Management,” said Ellis Carr, President and CEO of Capital Impact Partners. “I am excited to amplify our previous work by focusing our efforts in Washington, D.C., and engaging with residents to build communities of opportunity that provide a bright future for all those that call the city home.”
Capital Impact and Annaly have created a strong, long-term partnership through two joint ventures with a combined $50 million of commitments, which are designed to invest in loans that are cash flow generating, seasoned assets owned by Capital Impact. The investments represent a diverse mix of projects within the social impact investing landscape. Each joint venture is structured to make investments over a five-year period from the respective launch, and Capital Impact and Annaly have the option to increase their overall investment as each venture matures.
Annaly’s initial partnership with Capital Impact, announced in November 2017, supports nearly 500,000 square feet in community development projects across the U.S. in housing, education, health care, job training and healthy foods, employing 1,200 individuals. The charter schools funded through this partnership educate approximately 3,000 students, with 80% qualifying for free and reduced-priced lunches. The community health centers and eldercare residences supported by the joint venture provide care for nearly 30,000 patients, with 3,420 elders and nearly 14,000 below the poverty line served. Finally, the initial venture supports retail grocery that provides access to healthy foods in low-income areas and food production services.