A CUSO funded by 23 credit unions buys Affinity Federal Credit Union’s headquarters in Basking Ridge, NJ
Affinity Federal Credit Union will lease back the property for twenty years in a transaction coordinated by the CUSO CU Capital Management
LOS ANGELES, CA (January 9, 2023) — CU Capital Management, LLC, a Credit Union Service Organization (“CUSO”) that manages a network of credit unions and real estate holdings, announced a CUSO within its network, CCM Properties Two, LLC, purchased the property that headquarters Affinity Federal Credit Union (“Affinity”) in Basking Ridge, New Jersey. The transaction closed on Dec. 13, 2022.
The building boasts over 126,000 square feet of office space and has been owned and occupied by Affinity since 2008. The transaction agreement will lease the entirety of the property to Affinity for an initial term of 20 years with an option to extend. The $51.7 million purchase offers Affinity additional liquidity to be able to expand its branch locations with the raised capital and pursue its member-focused mission of improving financial wellbeing.
“Affinity’s mission remains centered on improving our members’ financial wellbeing, and the transaction facilitated by CU Capital Management positions us to immediately amplify this impact,” said Kevin Bauer, CEO of Affinity. “We have been approached by private investors interested in a sale/leaseback transaction with the credit union in the past, but this opportunity stood out, allowing us to partner with credit unions who share our long-term vision.”
This transaction succeeds others like it as office building ownership economics change. On February 18, 2022, the CUSO funded the purchase of a headquarters building owned by Wescom Central Credit Union in Pasadena, California in the amount of $59 million. Wescom, which had owned and occupied the property since 1985, was able to recognize a significant increase in net worth and is leasing back the full property for an initial period of 15 years with options to extend.
“In the rapidly changing economy we believe that many credit unions are in position to benefit from the immediate increase in net worth that a sale/leaseback can provide,” said Mitchell Amsler, CEO of CU Capital Management. “We expect to see growing credit union interest in all three components of our credit union sale/leaseback network now that the merits have been proven by large, respected, and well-capitalized credit union sellers, like Affinity, along with 23 credit union CUSO investors.”
CCM Properties Two, LLC is wholly owned by CUSO Realty Investors One, LLC, a CUSO that is co-owned by 23 credit unions. The transaction was financed with a combination of equity from the CUSO owners, and a loan originated by Michigan State University Federal Credit Union, with other credit unions buying loan participation interests. The CUSO owners and other lenders benefit by receiving attractive risk-adjusted returns over the full life of the lease.
“CU Capital Management and its network of credit unions and CUSOs have demonstrated the power of credit union collaboration,” said Guy Messick, CEO of NACUSO Business Services, a marketing partner of CU Capital Management. “We had an idea that, through collaboration, we could keep the players and benefits in these sale/leaseback transactions within the credit union community.”
Chris Pippett of Fox Rothschild LLP served as legal counsel to CU Capital Management, LLC and CUSO Realty Investors One, LLC on the transaction, with additional legal services for the CUSO network provided by Messick Lauer & Smith P.C. Eugene Huang of Wiley Malehorn Sirota & Raynes served as legal counsel to Affinity Federal Credit Union on the transaction.
About CU Capital Management, LLC
CU Capital Management, LLC, a Los Angeles-based CUSO co-owned by Maps Credit Union (Salem, OR), oversees a credit union sale/leaseback network that allows the full benefits of the sale/leaseback value chain to remain within the credit union movement by providing credit unions an opportunity to participate as sellers, investors and/or lenders. Sale/leasebacks provide selling credit unions with the opportunity to unlock capital through the sale of appreciated real estate assets while maintaining operational continuity through long-term leasebacks of the same real estate. Credit union investors and lenders receive attractive risk-adjusted returns, tied to long-term leases to Well-Capitalized credit unions and backed by high-quality real estate assets.
For more information, please visit: www.cucapitalmanagement.com.
About NACUSO Business Services
NACUSO Business Services (“NBS”) is a wholly owned subsidiary of the National Association of Credit Unions (“NACUSO”). NBS was formed to help credit unions connect with CUSOs that provide unique and effective service solutions.
About Affinity Federal Credit Union
Affinity Federal Credit Union is a full-service financial institution, member-owned, and community-focused, with a mission to nurture your financial wellbeing. With more than 20 branches across the tri-state area, Affinity is the largest credit union headquartered in the state of New Jersey, proudly ranking in the top 2% of all credit unions in terms of asset size. The Affinity difference is about people helping people on a deeper level and understanding what YOU need to make your unique dreams a reality. For more information, please visit www.affinityfcu.com.
Gregory FCA for Affinity Federal Credit Union