The Methodist Towers Incorporated, a faith based nonprofit, sponsored and built a 136 unit tower (43% covered under a HAP contract) that is elderly designated for 55 years and older. The property was built in 1973 and had not been renovated since construction. Although highly motivated to transact, the owner had a very specific list of goals that they sought to accomplish either through a sale or by hiring a developer and were uncertain what their best strategy would be. Their goals included a complete renovation for the property, improved social services, retention of management, and a buyback option/retention of ownership outright. The challenge to the Affordable Housing Group was to find a buyer or developer who could deliver on each of these goals while also navigating unfavorable market conditions and a strict timeline to execute Tax Credits during COVID and a bureaucratic state agency with tough guidelines. 

With an aggressive timetable and marketing plan, the team pursued the most qualified affordable housing developers nationwide, both non-profit and for-profit. After launching, 100+ qualified groups executed the Confidentiality Agreement expressing strong interest. Within 45 days 25+ tours had been scheduled, and with 60 days, initial offers had been submitted.

With these goals in mind, the Affordable Housing Group crafted a marketing campaign targeting large, active, and seasoned developers who have the ability and experience to navigate a LIHTC syndication for a 4% rehabilitation with PHFA quickly and efficiently. Our team sourced over twenty highly qualified national developers who competed to be selected to work with the organization.

Our group brought one of the nation’s top affordable housing developers to the table to make the most competitive bid; a flexible offer designed to meet each of the board’s goals. The board ultimately selected the option to sell the property to the developer with the option to buy back Methodist Towers after 15 years for $1 over the existing debt. The developer also agreed to retain onsite management staff. The competitive bidding environment created by the Affordable Housing Group produced a recapitalization price of $19.5M, with $65,000 per unit in renovations and extending the preservation of affordability for the next 20 years.