Affordable Housing Case Studies
Village Crest
Property and Transaction Overview
Village Crest is a 120-unit low income housing tax credit (“LIHTC”) property located in the Denver suburb of Commerce City. The property was built new in 2000 with equity from the sale of federal LIHTCs and debt from the Colorado Housing and Finance Authority (“CHFA”). Security Properties acquired the limited partner and general partner interests in order to preserve the chain of title allowing for multiple future transaction scenarios. In order to acquire the interests, Security Properties was underwritten by and successfully obtained approval from CHFA, and the limited partner.
MOREValue Added by Company
- Acquired the partnership interests preserving future transaction scenarios
- Approved by CHFA to acquire the partnership interests
- Formed a partnership with Commerce City Housing Authority qualifying the property for real estate tax exemption
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Suncrest Apartments
Property and Transaction Overview
Suncrest Apartments is a 100-unit low income housing tax credit (“LIHTC”) property located in El Paso, TX. The family property was acquired from the original developer and substantially rehabbed utilizing an allocation of 9% tax credits from Texas Department of Housing and Community Affairs (“TDHCA”). Additional sources of capital came from decoupling the Interest Reduction Payments from the original HUD 236 mortgage, along with HOME loan funds provided by the City of El Paso. New ownership also provided a dramatic improvement to the property amenities for the benefit of the residents, which include: a new community center for social and supportive services, a new synthetic turf soccer field within the property and an organized soccer league, canopies covering two centrally located tot-lots, a covered pavilion and barbeque area, and a computer learning lab.
MOREValue Added by Company
- Post rehab mark up to market on the Section 8 HAP rents
- Preservation of the property as affordable housing for 40 years
- 31% of the units restricted to 30% AMI, and an additional 15% of the units restricted to 50% AMI
- High-quality resident-focused property amenities
- Energy Star and water reduction focused scope of work to significantly reduce utility costs for ownership and the residents
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Lincoln Terrace
Property and Transaction Overview
Lincoln Terrace is a mixed-use development located in the Speer neighborhood of Denver consisting of 75 low income apartment units and approximately 10,000 square feet of ground floor retail space. The property was newly constructed in 2008 with the apartment portion partially financed with equity from the sale of low income housing tax credits (“LIHTC”) as well as HOME funds from the City and County of Denver and the State of Colorado.
Security Properties acquired the general partner interest from the original developer in the apartment portion of the project and the fee simple interest in the retail space.
MOREValue Added by Company
- Acquired the general partner interest in the LIHTC apartments and the fee simple interest in the retail space in an off-market transaction
- Security Properties was underwritten and approved to enter the partnership by the Colorado Housing and Finance Authority, HUD, the City and County of Denver, the State of Colorado and the investor limited partner.
- Completed lease-up of the ground floor retail
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Diamond at Prospect
Property and Transaction Overview
Diamond at Prospect is a 140-unit mixed-income apartment complex located in Denver, less than one mile from the CBD and proximate to Coors Field. The property was newly constructed in 2004 and is financed partially with equity from the sale of federal low income housing tax credits ("LIHTC"). Security Properties acquired the general partner interest from the original developer. In order to step into the partnership, Security Properties underwent a process to obtain the approval of the existing limited partner, the lender and the Colorado Housing and Finance Authority.
MOREValue Added by Company
- Acquired the general partner interest in an off-market transaction
- Security Properties was underwritten and approved to enter the partnership by existing institutional limited partner, lender and the Colorado Housing and Finance Authority
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Concord Crossing
Property and Transaction Overview
Security Properties acquired $9.5 million in promissory notes for $3.1 million, a 67.4% discount. Concurrently, Security Properties provided the borrower under the original loan a 12-month period to purchase the notes at pre-determined prices based on a 25% annual accrual rate, compounded monthly, on the $3.1 million acquisition basis. Security Properties also structured a forbearance agreement to provide the borrower 12 months to obtain conventional debt financing to take out Security Properties' invested equity plus profit. The borrower successfully obtained a takeout loan and exercised its option at 100% of the pre-determined strike price in February 2011.
MOREValue Added by Company
- Investment opportunity sourced off-market
- Sourced opportunity on March 18, 2010 and closed 25 days later on April 12, 2010
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Claremont Villas
Property and Transaction Overview
Claremont Villas is a 154-unit senior community located in the Los Angeles suburb of Claremont, California. Developed under the LIHTC program in 1994, the property was marketed for sale after its initial compliance period, but a break in the 10-year ownership chain prohibited a tax credit resyndication. In 2011, Security Properties acquired the fee simple interest in Claremont Villas utilizing a short-term bridge to permanent debt financing structure. The property has been preserved as low income senior housing through the maintenance of existing affordability restrictions.
MOREValue Added by Company
- Acquired a fee simple interest in the existing LIHTC asset and preserved long-term affordability
- Worked with CTCAC and the City of Claremont to facilitate the continuation and timely transfer of regulatory agreements
- Utilized a bridge financing structure to facilitate a quick close and competitive bid
- Partnered with the Hearthstone Housing Foundation, a regional non-profit, to provide an improved on-site resident services program
- Security Properties worked with the City of Claremont to adjust an incorrectly applied subsidy agreement, increasing gross potential revenue at the property.
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