a tale of two cities: multi-phase acquisition / resyndication case studies · 2017-02-22 · a tale...
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A Tale of Two Cities:Multi-phase Acquisition / ResyndicationCase StudiesF E B R U A R Y 2 2 , 2 0 1 7
C L A U D I A B R OD I E , S E N I O R V I C E - P R ES I D EN T , M C C O R M AC K B A R O N S A L AZ AR , I NC .
D A N I E L M . R O SE N, F O UN DI N G P A R T NE R , K L E I N H O R N I G , L L P
Who is McCormack Baron Salazar?
191 Projects | 20,000+ Homes
$3.7 Billion Invested
45+ Years1.44
million sf of commercial
22 States
2 Territories + D.C.
45 cities
900+ Employees
Who is Klein Hornig?
National Practice
www.kleinhornig.com
33 AttorneysBOSTONlocation
DC location
Firm Focus:Structuring, managing and closing affordable housing and community development projects
Who is Klein Hornig?
New Markets Tax Credits| Historic and Renewable Energy Credits
Community Development | Affordable HousingCommercial and Mixed Use
LIHTCPHA
Mixed-Finance
HOPE VICNIRAD
FHA insured LoansMark-to-Market
Section 236 Recoupling
HOME CDBG
Tax-exempt Mortgage Revenue Bonds
501(c) (3) Bonds
Case Study: Crawford RobertsPittsburgh, PA
Crawford Square
A City and Community on the Rise
Downtown has seen a tremendous amount of public and private investment in the past decade. From January 2006 through September 2016 alone, over $7.48 billion worth of investment projects have been completed, are actively under construction, or have been announced in Greater Downtown.
The Hill 1991 to 2006
About the Hill District
7 Phases | 863 Homes
$122 Million Invested by MBS
Since 1991
56Homeownership
108 Senior
Apartments
699 Family
Apartments
1Revitalized Community
Crawford Square Site Plan - Unchanged
http://www.post-gazette.com/business/development/2016/01/28/Peduto-strikes-deal-to-save-affordable-housing-at-Crawford-Square/stories/201601280116
Crawford Square Acquisition / Resyndication: Uses
One Phase346 Residential Units
152 Market | 194 LIHTC: 134>60%; 60<50%
Three Phases348 Residential Units
154 Market | 194 LIHTC: 147>60%; 47<50%
Crawford Square Acquisition / Resyndication: Sources
One Phase346 Residential Units
152 Market | 194 LIHTC: 134>60%; 60<50%
Three Phases348 Residential Units
154 Market | 194 LIHTC: 147>60%; 47<50%
Three Phases348 Residential Units
154 Market | 194 LIHTC: 147>60%; 47<50%
• Investor Exit from all 3 Partnerships
• No Real Estate Transfer (Transfer Taxes, Ten Year Rule)
• New 1st Mortgage Loan $13,000,000 (Bridge)
• New 2nd Mortgage Loan $6,000,000 (HACP -- Permanent)
• No Modification of Existing $16,000,000 Debt (Timing Question –OID/COD? True Debt Concerns Later?)
One Phase346 Residential Units
152 Market | 194 LIHTC: 134>60%; 60<50%
• Real Estate Transfer –New Entity to Purchase all 3
• New 1st Mortgage Loan $25,100,000
• Modification of Existing $16,000,000 Debt: Assumed by new owner, extend maturity, interest @ AFR
vOccupancy•Unit turns•Host Units
vFiscal Health•Managing DSC with existing lenders –three phases alone and roll up
vMessaging•Residents and Relocation- checkerboard•Construction •Owner/lender
Operations and Management Considerations
O’Fallon Place – The Other City
PittsburghM
SA R
ank
Popu
latio
n (2
015
Estim
ate)
% C
hang
e (fr
om
2010
Cen
sus)
Med
ian
Inco
me
Pove
rtyRa
te
Cou
nty
Pove
rty R
ate
Unem
ploy
men
t Ra
te
25 304,391 -0.43% 40,715 22.9% 12.0% 5.2%
20 315,685 -1.1% 35,559 25.5% 10.3% 4.0%
323,127,513 4.7% 53,889 13.5% 13.5% 4.9%
St. Louis
USA
The Near North Side: A Marginalized Neighborhood
6,000 units of Public Housing in one neighborhood…
Existing Site Plan & Ownership
RENOVATION DEMOLITION
Strategic Demolition and Renovation
O’Fallon Place – here we come…
Preservation Square Acquisition / Resyndication: Uses
Five Phases555 Residential Units120 Moved Off Site
Four Phases Overlaid into Two Phases
675 Residential Units
Preservation Square Acquisition / Resyndication: Sources
Five Phases555 Residential Units120 Moved Off Site
Four Phases Overlaid into Two Phases
675 Residential Units
Preservation Square Current Structure
THE VISION
Take Aways: Sources Per Unit
Take Aways: Uses Per Unit
Questions?F E B R U A R Y 2 2 , 2 0 1 7
C L A U D I A B R OD I E , S E N I O R V I C E - P R ES I D EN T , M C C O R M AC K B A R O N S A L AZ AR , I NC .
D A N I E L M . R O SE N, F O UN DI N G P A R T NE R , K L E I N H O R N I G , L L P