EDGE Communications from the
Portfolio Management Frontline
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May 2021
SYNDICATIONS Q & A WITH MARY ANN LANG Despite the changes and challenges that COVID-19 has brought about, CREA’s Syndication and Investor Relations team has continued to find ways to serve investor clients and expand its resources and expertise. Hear from Mary Ann Lang, Managing Director - Syndications, to gain Syndications’ insight and what can be expected in the future. due to the pandemic. Some of the major market changes that affected Syndications were: update investors today. • Section 8 Tolerance and Reserve Analysis: COVID changed
• Travel: We are in a sales role and want to be out in front of our clients. Changing how we do business to make sure we are hearing from and reaching out to clients in the COVID world was a big adjustment. We adjusted (like all companies) to Zoom, Teams, WebEx, snail mail and home deliveries, depending on investors’ needs, but can’t wait to be back out visiting clients! • Post-ClosingFollow-up: COVID led to uncertainties on construction, lease-up and rent collection. Investors wanted to hear more often about their portfolio health, so we worked closely with the Portfolio Management team to address investor questions around these topics and continue to
underwriting and what is attractive to investors. During the pandemic, investors became more confident in Section 8 contracts getting paid and staying with the properties and looked to that source of revenue during the uncertain times. In addition, CREA and our investors looked closely at our reserves and CREA created sensitivities to confirm how long reserves and deal sources would last if vacancies were higher than anticipated. • Underwriting Challenges: We worked alongside other internal departments to create COVID guidelines (Construction timeline cushions, contract bid analysis, etc)...
HowwasSyndicationsmosteffected by COVID-19 & the pandemic? Despite COVID and uncertainties throughout 2020, the Syndications team and CREA’s investors stayed the course and continued to close a record amount of equity in 2020 and are tracking to have a big year in 2021. This has a lot to do with the strength of the Syndications team and how quickly we can adapt to the market changes that happened
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EMPLOYEE SPOTLIGHT: BRANDON CONWAY
PROPERTY IMPACT STORY: 915 BROAD STREET
Nearly 15 miles outside of New York City, 915 Broad Street is in the heart of downtown Newark, New Jersey. 90,000 square feet and five floors host 84 mixed-income residences directly above ground level retail, making it accessible to Newark residents and a great option for individuals and families looking for affordability and convenience...
After over 10 years at CREA, working within and alongside the Asset Management department - not to mention under the wing of Wayne Nelis, Brandon Conway, SVP - Special Assets has experienced a lot (including some serious travel tribulations and hilarity along the way). Learn more about Brandon and Special Assets... continue on page 6
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P2 SYNDICATIONS Q&A, CONT. P2 NEW HIRES
P3-4 PROPERTY IMPACT STORY, CONT. P6-7 EMPLOYEE SPOTLIGHT
P8 AWARDS, DEADLINES & GOOD-TO- KNOW INFO
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SYNDICATIONS Q & A WITH MARY ANN LANG, CONT.
The has experienced a lot of growth in the last 6 months; how does this play into CREA’s long-term goals? Syndications team Yes. While we have several new faces, none of them are new to LIHTC. Growing a group certainly has its challenges, but we have benefited from the knowledge of our recent hires, finding best practices, and reinforcing our own procedures. We’re excited about how this will enable us to better serve the needs of investors with strategic planning and relationship development. This in turn reflects long term company goals to continue to be a relationship-focused company that grows organically with our clients. What is Syndications doing to prepare for an increase in the corporate tax rate and how will that affect the appetite for affordable housing investments? From what we’ve seen, investors are not yet ready to price in any increases to corporate tax rates. The Syndications Team will run sensitivities at higher tax rates for investors who request them. CREA has been investing in DEI and social impact. Are you seeing an increase in Investors who are also making these initiatives a priority? Yes, we have seen this across the board. We have seen investors who have not been in the market for a while come back into the market to invest in specific areas or developments that positively affect minority populations. In addition,
a number of our bank clients have created their own initiatives and set aside dollars dedicated to specific populations. To make sure CREA understands which properties in our pipeline meet specific criteria, we’ve updated our tracking database to include additional analysis, so that we can sort and review a pipeline of properties that may fit a particular investor’s criteria. How is Geo fairing? The Syndications team mascot is happy, healthy and enjoys walks in the Back Bay. He is eagerly awaiting a full office staff to give him attention. - As an aside, the Syndications team is very serious about our love for dogs and puppies! We have 9 canine family members between our 14 team members and I anticipate that number to grow.
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that helped protect investors’ interests and provide their credit committees comfort to continue closing transactions. still impacting the world we live in, so we will continue to implement some of these changes and adapt as needed. Unfortunately, COVID is What can CREA anticipate from our investors through the end of 2021? Due toCOVID, one thingwe noticed at the beginning of 2021 was that many investors were delayed in getting their internal directives for investing (for various reasons, including new CRA initiatives and concerns of tax liability). I believe this will lead to some additional activity mid to late this year, once the investment teams have decided on their goals. Another change we’ve seen recently is that our investor contacts have changed due to moves between organizations, bank mergers, etc. While this is not a new concept, given our lack of in-person meetings, our established calls with investors and consistent outreach to clients is critical for us to understand their current needs or initiatives. Proprietary versus multi-fund placement, new debt focus, social impact investment considerations, etc. - These are the types of changes or requests we are seeing and have been working closely with investors to meet specific needs and goals.
Any notable stories of success or unique anecdotes? The two CREA Funds currently in the market have been very successful. The CREA CA Fund is the largest CA Fund in the market at $129M. The CREA National Fund closing in June is currently subscribed to $400M. These are big feats in this environment. We owe all of this to our clients and their trust in CREA.
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MEET OUR MOST RECENT PORTFOLIO MANAGEMENTS NEW HIRES!
and a master’s degree in accounting. In her free time, she enjoys hiking, kayaking, and crafting.
two years’ LIHTC asset management experience. He holds a Bachelor of Science in business from the University of Scranton and is New Englandcompliance certified through the Affordable Housing Management Association (NEAHMA). In his spare time, Sam enjoys traveling, coaching youth basketball, and skiing.
Mike Regan, SVP, Dispositions Boston
Matt Holmes AVP - Development, Asset Management Indianapolis
Mike has 17 years’ experience working on LIHTC dispositions and is an active advocate for affordable housing accessibility. He holds a bachelor’s degree in financial economics at St. Anselm College and a Certificate in Real Estate Finance at Boston University. Mike can be found teaching his daughters how to ski, play hockey, fish or sail.
Matthasauditing, LIHTCdevelopment and private equity experience. He earned his CPA designation, as well as bachelor’s and master’s degrees from Ball State University. Outside of work, Matt enjoys hiking with his dog, cycling, paddle boarding, and playing tennis or golf.
Andrew Teal Asset Manager - Stabilized Boston
Andrew Teal comes to CREA with 5 years’ asset management experience. He earned a Bachelor of Arts in economics from The Ohio State University and is Housing Credit Certified Professional (HCCP) certified. You can find Andrew running, camping, or pickling vegetables.
Jennifer Marks VP, Special Assets Boston
Mitch Derucki AVP, Fund Management Indianapolis
Jennifer has 12 years’ asset management experience, including six years in LIHTC. She holds a Bachelor of Science in finance from the University of Connecticut, as well as her Housing Credit Certified Professional (HCCP) designation. Outside of work, Jennifer enjoys hiking and traveling with her husband and two children. She also recently acquired a sourdough starter and is working on perfecting a sourdough pizza crust.
Just a few days new, CREA welcomes Mitch to the Fund Management team! He has over 5 years’ auditing experience and graduated from Purdue University with a bachelor’s degree in accounting with finance concentration. Mitch enjoys spending time with family, sports (Purdue, Cubs & Titans), exercise, golfing, yard-work and traveling. He and wife, Sarah, are expecting their first child, Lylah Mae, in June.
Ian McBurney Asset Manager - Development Indianapolis
CREA’s Asset Management team welcomed Ian just last week! He comes to CREA with nearly 5 years’ experience in commercial real estate, underwriting and asset management. He holds bachelor’s degree from The Ohio State University, as well as his master’s from Capital University. He and his wife, Lauren, enjoy hiking, traveling, and hosting friends and family.
Farrah Taylor AVP, Fund Management Indianapolis
Sam Smit Asset Manager - Development New York
Farrah comes to CREA from a local accounting firm where she spent 7 years. She holds her CPA designation
Sam is CREA’s first asset manager within the New York office, bringing
Find our full team online here.
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PROPERTY IMPACT STORY: 915 BROAD STREET, CONT.
of LEED Gold certification by the U.S. Green Building Council.
development, Cornbread and IHOP reside on the ground floor, owned and operated by restaurateur and real estate developer, Adenah Bayoh, who also co-owns the building and was responsible for bringing the project to fruition. The impact 915 Broad Street brings to the Newark community is intertwined in Adenah’s personal experience and the larger narrative of The American Dream. While Adenah Bayoh, CEO of Adenah Bayoh & Companies and Co-founder of Cornbread, has earned her standing as a successful entrepreneur, her story starts in Liberia where she escaped the civil war. Immigrating to the United States at age 13, she attended a public high school, put herself through college, secured a job in banking, and started investing in multi-family homes. Out of the success of these investments, Adenah was able to leave banking and concentrate her skills and
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...With 55% affordable housing and 45% market rate, 915 Broad Street overlooks the Newark City Hall and is minutes from Newark Penn Station, Rutgers University and the Passaic River waterfront area, as well as an array of entertainment and restaurant offerings. The amenity package includes open floor plans with walk-in closets, solid surface counter tops and stainless- steel appliances, oversized windows, outdoor space, a community room, fitness center, concierge service, and state-of-the-art security. 915 Broad Street was designed by Urban Builders Collaborative, JKRP Architects and Adenah Bayoh & Companies with efficiency in mind. Residents benefit from energy- efficient appliances, high efficiency HVAC systems and best practices for indoor air quality and ventilation, reflected in the recent achievement
However, there’s more to this development than accessibility, efficiency, and stylish furnishings. 915 Broad Street is the result of persistence and determination from partners who were essential in its successful completion. “We persevered through some extraordinary events – the most obvious being the pandemic, but also a milestone change in the tax code and significant unforeseen conditions in the ground,” said Matt Gross, Executive at Lettire Construction Corp and Partner at Urban Builders Collaborative. “Through everything, all partners were passionately committed to 915 Broad Street and the City of Newark, and we believe the final product reflects that.”
Located within the mixed-use
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energy as a business owner “focused on transforming and empowering disadvantaged communities.*” “915 Broad Street represents the continuation of Newark’s ongoing renaissance and revitalization,” said Adenah. “It reflects the goal I bring to every project, which is to deliver accessible and high- quality housing and hospitality services to communities that have been often overlooked. We wanted to ensure that this building was thoughtfully designed and built by qualified businesses local to Newark with backgrounds that reflect the community.” Adenah now owns and operates several individual IHOP franchises in New Jersey, as well as a real estate development portfolio that includes various residential and commercial urban redevelopments. Most recently, Adenah opened her own signature fast casual, farm-to-table, soul food restaurant, Cornbread, alongside co-founder, Elzadie “Zadie” B. Smith. Their third and
latest location at 915 Broad Street launched on February 24th.
we can connect individuals within affordable housing communities to employment, healthcare and education opportunities, it is a success. But the personal connection and influence that 915 Broad Street offers through Adenah is all the greater because of her.” While becoming one of the most successful entrepreneurs in New Jersey, as well as the second largest employer in the Township of Irvington, New Jersey, Adenah is also a mother of two young children. Learn more about Adenah here. In addition to LIHTC equity provided through Sterling National Bank, 915 Broad Street was financed with an additional $17.2MM construction loan from Sterling Bank, a $11.8MM Freddie Mac perm loan from Capital One, and a $2.5MM developer loan.
Adenah adds, “In regard to IHOP and Cornbread, for me the hospitality industry is about people, which is why customer service and investing in the staff and community that we serve are guiding principles at all of my restaurants. I am grateful to the people of the community for welcoming us and embracing and supporting this project.” Through her investments within the communities where she does business, Adenah has been able to serve individuals and families looking for affordable living, places to enjoy good food and connection with family and friends, and employment opportunities where people are valued, all while empowering women and individuals of color. “Adenah doesn’t simply embody ‘The American Dream’ – she has redefined it,” said Neala Martin, SVP, Acquisitions at CREA. “When
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EMPLOYEE SPOTLIGHT: BRANDON CONWAY
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about your role and working on these trouble assets? Each property that is transitioned to Special Assets is in fact “special” and each bring their own unique set of challenges that set them apart. I have learned there isn’t a specific road map to resolution that can be mimicked or duplicated from one deal to the other. We instinctively try to think “outside the box” to arrive at a solution that benefits all partners. Additionally, we must be nimble and have the ability to pivot since, in many cases, the dynamic of each issue changes frequently. What is a typical day like in the Special Assets department? I realize “typical” and “special assets” is a bit of a oxymoron! My days are usually predicated on which property is in need, or is approaching a specific delivery deadline. As properties proceed down the path of their work out plan, there are various benchmarks that are critical which typically need to occur in a timely manner, whether it be an equity disbursement, payment of sub-contractors, investor consent, loan refinance, bond redemption, etc. These action items typically take precedence in my day. However, when not working on specific benchmark deliverables, I’m constantly following up via email and phone with partners related to open items. I’m also in regular contact with CREA management to provide updates and discuss work out plans
related to the special assets portfolio. How do you manage the transitions between your department and the Asset Management department to ensure a seamless transition, both internally with colleagues, and externally with clients? Internally, Asset Management and Special Assets created a transition template which is utilized to outline property specifics, location of pertinent documents, and contacts. Once a deal is transitioned to Special Assets and the template is completed, there is typically an internal call to discuss points of emphasis. After speaking internally with the asset manager and understanding the issues at hand, I will reach out externally to the GP, and relative parties, introducing and inserting myself into the transaction. My goal is to build a relationship, emphasize the ability to work together, and set expectations. With Wayne Nelis’ retirement, we all miss his expertise, knowledge, and of course humor. What are you going to miss the most about working with Wayne? I worked for Wayne for 10+ years and thoroughly enjoyed working with him. We shared many business and personal stories, as well as achieved many accomplishments along the way. He always emphasized to have a good work ethic, never shy away from a challenge, and not to be afraid to get your hands dirty or have a difficult conversation. I will miss the
You’ve been with CREA for about 11 years, first in Asset Management group before focusing on Special Assets for the last several years. Tell us more about your group and how it is different than the Asset Management department. The Special Assets department consists of myself and Jen Marks, who was recently hired due to Wayne Nelis’ retirement. The Special Assets department is assigned properties that may have an issue or issues that result in a significant amount of time needed to resolve. We are here to alleviate that work load from Asset Management so the asset managers can work more efficiently with their assigned portfolios. Special Assets typically balances anywhere from 20-30 properties at a time with challenges ranging from partner disputes, significant construction delays, cost overrun and out of balance budgets, or chronic low occupancy and debt coverage ratios. Unlike asset management, which differentiates pre-stabilized and stabilized portfolios, Special Assets tackles all properties transitioned over, regardless of status. We collaborate with business partners to resolve all issues and stabilize the property before transitioning it back to asset management. Special Assets is an Asset Management function, but can be quite complex and challenging. What is the most difficult thing
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loyalty Wayne displayed on a daily basis. He was always reliable, true to his word, and delivered on his obligations and promises. Do you have any entertaining or funny stories to share about your time with Wayne – maybe during your travel escapades together? I have many entertaining and funny stories about Wayne. Wayne and I traveled together all over the country over the past 10+ years. It was recommended at one point we start a YouTube channel documenting our travels and conversations during long car rides and airport layovers. That never quite took off. However, if it had, we would have captured some unbelievable moments, including our run in with a 400lb hog in a breezeway in West Virginia, the time we decided to walk from our hotel to the Integratec office in Atlanta and ended up walking along the side of the interstate, or our unfortunate luck of each of us getting speeding tickets while traveling through the same small town in Texas. Although we had many funny experiences, Wayne and I both agree the funniest experience we had was a couple of years agowhenwewere driving down Hollywood Blvd in Los Angeles to visit one of our properties. We were in typical LA stand-still traffic, however we were close to the property. So, in the middle of Hollywood Blvd, Wayne asked me to get out of the car and walk up to the property while he finds a place to park. Without hesitation I opened the passenger side door. Instantaneously, a screeching sound occurs as a bicyclist riding down
the middle of the street puts on his brakes just before hitting the inside panel of the passenger door that I opened. The bicyclist’s momentum from breaking caused him to fall inside the front seat of our car! The bicyclist then proceeded to hop right up, pick up his bike, and ride off as if nothing happened. As a dad of three children, you’re surely extremely busy. How do you spend your weekends with them? I have a 12 year old son, Bowen, 10 year old daughter, Arden, and 8 year old son, Preston. We are a sports family! I’m a coach for a year- round youth basketball organization, Hickory Hoops. I coach both Bowen and Preston’s teams. In addition to basketball, Preston also plays travel baseball for Fishers Express. Arden plays travel soccer year-round for a local soccer club, Indy Premier, and competes against teams throughout the Midwest. My wife and I “divide and conquer” getting our kids around to all of their sporting events. Every weekend is action-packed. However, we wouldn’t have it any other way!
Best/funniest CREA memory? Besides winning the 2020 CREA Fantasy Football League….I would say the fact that Roger Shank throws me the ultimate birthday party every year, as my birthday falls on International Talk Like A Pirate Day (September 19th). The day consists of scavenger hunts, matching pirate t-shirts, awkward and confusing pirate conversations, and plenty of snacks! Favorite vacation spot? With the kids, it is Destin, FL. Without the kids it is Naples, FL. If you could have a super power, what would it be? I would like to have the power of reading minds. It would certainly help me in Special Assets!
RANDOM QUESTIONS & AWESOME ANSWERS
What are you most looking forward to about life post-pandemic? From a work perspective I’m looking forward to getting back out and visiting properties. Visiting the sites is invaluable! From a personal perspective, I’m looking forward to attending sporting events and concerts.
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AWARDS & KUDOS
Congratulations to Woda Cooper Companies on the deserved recognition of Prospect Yard as a winner of the Ruth Ratner Award. Prospect Yard is an adaptive reuse community, serving 42 families in Cleveland. Given annually this award is presented to “downtown community members and entities to recognize achievement in the advancement of downtown Cleveland.” HAPPY RETIREMENT, WAYNE!
It has truly been an honor and privilege to have had Wayne Nelis a part of CREA’s story for the last 14 years. CREA is better today for his efforts, work, and humor. While he will always be a part of our work family, we wish Wayne the very best (including lots of golf and beach time) in his retirement!
At this time, the majority of the CREA Fund audits and tax returns have been delivered to investors. This tax season was a challenging one due to changes in tax legislation with little IRS guidance as well as the ever changing COVID environment. There are a few funds that are being wrapped up in May due to delays in getting lower tier information. Overall, it was another successful tax season! 2021 TAX SEASON
GOOD TO KNOW
2021HUDIncome Limits – The HUD income limits were released on 4/1/2021. There is a 45 day grace
Eviction Moratorium – The Centers for Disease Control and Prevention (CDC) Eviction Moratorium has been extended
CREA Stats – Based off of tracking from May 2020 to March 2021, CREA’s average collections for our portfolio are 94%. Additionally, there is now dedicated asset management
period for implementation of new rent and income limits (5/15/2021).
to 6/30/21 in order to continue to prevent further spread of COVID-19.
presence within CREA’s Boston, New York and San Diego offices with the addition of recent new hires.
IRSNotice 2021-12 - In January, the IRS issuedNotice 2021-12, giving relief for various LIHTC requirements, including: • 12/31/20 Placed In Service deadlines have been extended to 12/31/21 • Extensions for 10% Tests as well as other rehab expenditure periods • Tenant income recertification waiver extended to 9/30/21 • State agencies are not required to conduct compliance monitoring reviews through 9/30/21 • Extension to satisfy occupancy obligations for the 1st year of the credit period
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