Wallick Communities has been a leading provider of affordable housing in the Midwest for more than four decades.
Headquartered in Reynoldsburg, Ohio, the company’s four operating divisions (Wallick-Hendy Development, Wallick-Hendy Properties, Wallick Asset Management, and Wallick Construction) have developed and constructed hundreds of affordable multifamily projects and manage more than 14,000 units in more than 200 communities.
Last year, the firm, which ranked No. 38 on Affordable Housing Finance’s top owners list, made investments in more than 2,000 of its units and received five low-income housing tax credit awards out of its seven applications.
Co-owner Howard Wallick shares with Affordable Housing Finance the latest on the company’s new asset management division, other highlights from 2013, and its goals for the coming year.
AHF: Wallick's new asset management division completed its first full year in 2013. How has this division helped the company as a whole, and what were its main accomplishments?
Wallick: We initially created an asset management function about five years ago with a single asset manager focused on helping with troubled assets. That worked, but we then realized it could be much more. So, in mid-2012, we created an asset management business unit, focused on creating economic value for the company. We put dollar targets and measurements in place, and so far we’re achieving those targets. The value is being created through some defense (stopping the bleeding on troubled assets), but more on offense, consisting of focused efforts on revenue (rent) management, real estate tax reductions, purchasing, distributions, Mark-to-Market fees, and acquisitions of limited partnership (LP) interests. Additionally, asset management helps keep all of us accountable, through better measurement and reporting and by being willing to ask the tough questions. We plan to, over time, expand the unit’s activities into increasing the value of our third-party management of customers’ assets.
AHF: Wallick broke ground on The Grove at Oakleaf Village, a $6.3 million memory-care community, in Toledo. Why did Wallick decide to expand into the memory-care field?
Wallick: Honestly, it was low-hanging fruit. We have a very strongly performing assisted-living (AL) community in a very solid submarket, which happened to have an unused acre of adjacent land. We researched the best use for that land and determined there was a real need for memory care in that market. Additionally, we realized there were substantial cost synergies from operating a memory-care community on the same campus as an existing AL community. Our plan is to prove out this model and then replicate it elsewhere.
AHF: What other innovative work did Wallick do in 2013?
Wallick: We’ve continued our program to acquire LP interests and made significant investments in this area. We had a lot of individual limited partners in partnerships that were syndicated prior to 1986, and they generally found themselves in an illiquid position. We offered them a fair price and gave them the opportunity to exit. Most did. For us, we were able to invest in assets that we know well and already control (through general partnership interests), and the result is to build another annuity for the business.
AHF: What are the company's goals for 2014?
Wallick: Fairly simple: We’ll continue to execute our strategy, which is to push to be the leading service provider in our space and to affirm our culture. We define that as being a company where people and values come first, where quality is more important than quantity, and where our customers will reward us based on the quality of our service.
AHF: What's your biggest industry concern for the new year?
Wallick: As an industry we rely so heavily on government programs and funding, it has to be top of mind for all of us. We know our programs are generally very efficient and effective, and it appears they are on fairly solid ground for now, but we can’t ever take that for granted.