Preservation deals: Finding the sweet spot
Sometimes preservation deals happen when a developer is in the right place at the right time. That’s the case with Preservation of Affordable Housing, Inc. (POAH), a Boston-based nonprofit that purchased six affordable properties in Massachusetts from a single seller last summer. It has completed renovations to preserve them as affordable rentals for another 40 years.
POAH bought the properties – containing 841 apartments including 537 in downtown Boston – from State Street Development Management Corporation, which was exiting the affordable housing business and had previously sold several properties to POAH.
“We were able to wrap all of the properties together in one portfolio execution and take it down relatively quickly,” says Rodger Brown, POAH’s Managing Director of Real Estate Development. He said a major portfolio Preservation, continued from page 18 acquisition – this was POAH’s fourth – “also gives us the power to create cross subsidies within the portfolio when necessary. In some deals, the price the seller wants may not be supported by the economics of the deal as we would envision the execution. But to the extent we can create an execution on another piece of the portfolio that generates capital beyond the needs of that particular asset, we have methods of upstreaming and downstreaming money to different properties in the portfolio to achieve overall feasibility.”
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