- BRIDGE Housing and KeyBank/KeyBanc issued $71.5M in publicly offered tax-exempt construction bonds to finance hollywoodHUB, a rare municipal-market deal for a nonprofit developer.
- The 12-story, 222-unit transit-oriented Portland project targets deep affordability, with most units at ≤60% AMI and the rest at ≤30% AMI, delivering in 2027.
- BRIDGE’s AA- rating drove 4x oversubscription and lower borrowing costs, with reported savings of roughly $2.5–$4M versus alternative financing.
- The deal pairs public bonds with LIHTC equity and permanent debt and serves as a scalable model, though it relies on strong credit and remains exposed to rate, execution, and policy risks.
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This financing model represented by hollywoodHUB marks a strategic inflection point for non-profit affordable housing developers. Traditionally reliant on LIHTC, grants, and private placements, BRIDGE Housing leverages its strong credit profile to issue publicly offered tax-exempt construction bonds, thereby accessing institutional capital at more favorable rates. The four-times oversubscription underscores market appetite for well-structured mission-aligned deals backed by credible issuers. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-raises-71-5-million-in-unprecedented-bond-offering-to-finance-one-of-the-largest-affordable-housing-developments-in-portland-oregon/?utm_source=openai))
The capital stack for hollywoodHUB combines municipal bond financing, LIHTC equity, and a permanent loan. By securing about $71.5 million in bond proceeds, $62 million in LIHTC, and $18.5 million permanent debt, BRIDGE minimized capital costs and achieved savings estimated at $4 million in the recent KeyBank-sponsored article and $2.5 million per the press release, reflecting different calculation bases. ([key.com](https://www.key.com/businesses-institutions/business-expertise/articles/breaking-barriers.html?utm_source=openai))
Beyond cost savings, the model confers speed, predictability, and scalability. The ability to underwrite and close large capital raises without entirely depending on public subsidy or private credit enhancements reduces execution risk. BRIDGE’s additional $175 million Social Bond and new $350 million impact fund illustrate a vertical escalation of this approach that can help bridge the gap in affordable housing supply across high-cost West Coast metros. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-bond-issue-exceeds-expectations-raising-175-million-to-accelerate-development-and-acquisition-of-affordable-housing/?utm_source=openai))
Nevertheless, risks remain. Construction bonds involve timing and permitting risk; future bond offerings might be sensitive to interest rate fluctuations and credit spreads. Dependence on strong credit rating limits replicability among smaller or less creditworthy nonprofits. Public policy and regulatory risk (e.g. tax-exempt status, municipal bond regulation) must be closely managed. Replication demands financial, legal, and internal organizational capacity that may not exist in many jurisdictions.
Supporting Notes
- hollywoodHUB is a 12-story, 222-unit affordable housing project in Portland selected in 2017 via a competitive bid by Tri-County Metropolitan Transit District. ([key.com](https://www.key.com/businesses-institutions/business-expertise/articles/breaking-barriers.html?utm_source=openai))
- The bond issue was $71.5 million in tax-exempt construction bonds underwritten by KeyBanc Capital Markets, first such transaction for a nonprofit in decades. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-raises-71-5-million-in-unprecedented-bond-offering-to-finance-one-of-the-largest-affordable-housing-developments-in-portland-oregon/?utm_source=openai))
- S&P Global Ratings assigned BRIDGE Housing an AA- rating—the highest among nonprofit developers on the West Coast. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-raises-71-5-million-in-unprecedented-bond-offering-to-finance-one-of-the-largest-affordable-housing-developments-in-portland-oregon/?utm_source=openai))
- Investors oversubscribed the construction bond by a factor of four. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-raises-71-5-million-in-unprecedented-bond-offering-to-finance-one-of-the-largest-affordable-housing-developments-in-portland-oregon/?utm_source=openai))
- Project’s affordability breakdown: two-thirds of units ≤60% AMI, one-third ≤30% AMI; 55 units with project-based Section 8 vouchers. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-celebrates-groundbreaking-of-one-of-portlands-largest-affordable-housing-communities/?utm_source=openai))
- Amenities: transit access to three light-rail (MAX) and three bus lines; neighborhood features include grocery, schools, hospital; community rooms etc. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-celebrates-groundbreaking-of-one-of-portlands-largest-affordable-housing-communities/?utm_source=openai))
- BRIDGE’s growth plans: goal to add 5,100 affordable housing units by 2027; portfolio growth by ~11.5% in 2024; assets over $4B; pipeline of >10,000 units. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-bond-issue-exceeds-expectations-raising-175-million-to-accelerate-development-and-acquisition-of-affordable-housing/?utm_source=openai))
- They have also launched the BRIDGE Housing Impact Fund I ($350 million equity target) to leverage ~$1B for acquisition/preservation work. KeyBank and BMO each put in $25 million, PGIM Real Estate also involved. ([bridgehousing.com](https://bridgehousing.com/press_releases/bridge-housing-launches-private-equity-fund-aimed-at-investing-1-billion-to-acquire-and-create-affordable-and-workforce-housing-on-the-west-coast/?utm_source=openai))