Ascenda Capital, CMFA Buy Latitude33 Apartments for $97M

Ascenda Capital and the California Municipal Finance Authority have partnered to acquire Latitude33 Apartments in Escondido for $97 million. Located at 515 Meander Glen in the center of Downtown Escondido, the property has 198 units, most of which are three-level townhomes with attached garages and private entrances.

The partnership will transition the property from market-rate units to affordable housing units for middle-income families. All of the units will be reserved for tenants making 60% to 120% of the median area income, which will likely include first responders, nurses, teachers, social workers and military personnel. As the project administrator, Ascenda Capital will reduce the current rents by 26.5% compared to current market rents. However, current residents that do not qualify for the income requirement will not be displaced. As units turn naturally, they will be transitioned into income-restricted units.

“We are thrilled to be providing middle-income families in Escondido with such a high quality of living at affordable rent levels,” said Ascenda’s Matt Avital in a statement about the purchase.

Investors have shown an increased appetite for affordable housing following the pandemic. For example, The Jonathan Rose Companies’ The Rose Affordable Housing Preservation Fund V acquired the Kings Villages Apartments in Pasadena for $223 million. The property includes 313-unit LIHTC and HUD-regulated Section 8 and Section 42 LIHTC, for a total of 355 units. According to Nathan Taft, Senior Managing Director of Acquisitions at Jonathan Rose Companies, the fund closed the acquisition in record time, reflecting the imminent need for affordable housing in Southern California.

Experts expect affordable housing development to ramp up over the next five years nationally, thanks to essential support from the federal government. Jennifer Litwak, executive director at Housing on Merit, forecasts “rapid acceleration” of affordable housing development. She was most encouraged by the recently passed legislation that will drive $322 billion in housing and community development resources, which passed The U.S. House of Representatives Financial Services Committee in mid-September.

Ascenda Capital’s purchase of Latitude33 Apartments is the second transaction in San Diego County through California’s Essential Housing Program.