THE SUPPORTIVE HOUSING NETWORK
2017 ANNUAL CONFERENCE
Preservation Panel
June 1,2017
Arlo M. Chase
Services for the UnderServed
1
Introduction to SUS
• SUS is a New York not-for-profit, 501(c)(3) social service provider
founded in 1978
• Provide housing and services to a broad range of populations:
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Persons with mental illness
Persons with intellectual and/or developmental disabilities
Person experiencing homelessness
Persons with HIV/AIDS
Veterans
• Operate in all 5 boroughs serving over 25,000 individuals every year
• Geographic concentrations in Central Brooklyn, East Harlem, and the West Bronx
• Employ nearly 2,000 people full time, with an operating budget of $190M
• Own or lease 120 buildings, with close to 1.7 million square feet under
control (including residential, program and office).
2
SUS Existing LIHTC/Supportive Housing
Supportive Housing
• Among the three largest providers supportive housing in New York State
• We provide permanent housing for more than 2,200 New Yorkers
o 1200 scatter site apartments
o 16 leased buildings developed with LIHTC, with over 730 apartments of
permanent supportive and affordable housing
o Range in % of supportive population from 30% (in construction) to 100%
LIHTC Pipeline
• Four projects in construction (320 units)
• Four more in pre-development (750 units+)
3
SUS LIHTC Pipeline: New v. Old
Palladia Merger: December 2014
• 9 LIHTC properties
Result: 2 different portfolios:
• New Construction with heavy PB Section 8 (SUS portfolio)
• Mod Rehab with less rent/operating subsidy (Palladia
portfolio)
4
Newer
Older
Private debt (both 4% and 9%)
Bigger properties/new
construction
Private acquisition of land or RFPs
More Joint Ventures
City land
Smaller
Mod rehabs
No hard debt
Year 15 goals
4 Overarching goals for our Year 15 Portfolio
• Provide quality housing for our residents
• Preserve and maintain our existing real estate assets
• Use our size to create economies of scale and improve efficiency of
operations
• Create value and cash flow for the parent entity (SUS Inc.).
6
Year 15: Strategic Considerations
DIVERGENT YEAR 15 PORTFOLIO
• Stratford Ave., Dreitzer House, & New Life Homes (entering year 15
with healthy reserves and adequate cash flow)
• Goal: Manage to year 15 exit with healthy recapitalization and cash to the
parent entity.
• Consideration: Investor expectation of reserves.
• Struggling Older LPs (Chelsea Court, Cedar Tremont, Boston Road,
and Flora Vista)
• Two of these DHCR funded properties are already through Year 15. They
are all are cash flow neutral and have significant deferred capital needs.
• Goal: Evaluate a pooled HPD year 15 participation to enable a
recapitalization
7
Getting Ready for Year 15:
Asset Management Strategies
• Improve data collection and financial analysis of financial condition of LPs
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implement dashboard to allow for rigorous and regular financial oversight of LPs
• Increase focus on rent collection and implementing allowable rent increases
• Properly capture and allocate shared costs (central maintenance, executive)
• Properly balance centralized management and empowering property staff
• Routinize preventive maintenance and complete internal capital
assessments of all properties
• Use year 15 transactions to provide for recapitalization of LPs, address
deferred capital projects and allow for cash distributions to parent
8
THANK YOU
My take away:
Development is easy compared to asset management
Arlo M. Chase
9
Senior Vice President, Real Estate
& Development
Services for the UnderServed, Inc.
T: 917.408.1695
E: [email protected]
W: www.sus.org