Debra Koehler is president and founder of Sage Partners, an affordable housing developer in Tampa, Fla.
Her projects have included the prominent Metro 510 development, a project that combined the repurposing of a historic Tampa church with the building of 120 apartments, and Aqua, the rehabilitation and preservation of a major seniors seniors community. During her career, Koehler has been involved in the development of more than 10,000 affordable units.
What was your very first job?
My very first job was actually two jobs. To pay for college, I worked two jobs during the summer. I grew up in rural Virginia and tobacco was the backbone of the economy. In the early mornings, I worked for a local farmer harvesting tobacco. Then, I worked the 3-11 shift in a plywood plant. While I did not mind manual labor, these jobs were the motivation to get an accounting degree. At that point, manual labor would be optional, not mandatory.
What was your path into affordable housing?
While working with KPMG, a local real estate developer with an impeccable reputation recruited me to join them as an accountant. Subsequently, I experienced the cyclical nature of real estate, learning so much more from the difficult times than the good times. During the early 1990’s recession, we needed to diversify from developing commercial office buildings and hotels to survive. In 1993, we received our first tax credit allocation. Almost 40 communities later, I am still learning the nuances of our business.
How’s business?
In my 20 years in the affordable housing business, demand has never been stronger. We focus on senior housing and the silver tsunami is in full force. Our waiting lists are very long. Since we promote healthy living environments for our seniors, the turnover is minimal during the year.
What is Sage Partners working on?
We just finished refinancing the permanent debt on our latest senior housing community. The loan terms were very favorable and it was the smoothest closing in my career. The loan closed in less than six weeks from application date. Now that our portfolio has fixed long term debt on all assets, we are focused on energy cost reduction.
What’s a recent move that you made that other developers can learn from?
Asset management is crucial. We have implemented a top down and bottom up approach. Top down starts with meaningful budgets and reporting. Bottom up approach involves understanding the details of staffing, checklists for property maintenance, timely compliance reporting and improving resident services, just to name a few. Our philosophy is: You get what you inspect, not what you expect.
If you could add any design feature or amenity at one of your developments, what would it be?
A majority of our communities serve the 55 and better population. We started adding designated craft-hobby rooms. It provides another opportunity for our residents to socialize and make a difference. At Aqua, our residents crocheted over 100 caps for pediatric cancer patients at a local hospital.
How is affordable housing development changing?
Affordable housing development changes with technology, better products, and increased competition. The challenge for Sage Partners is to stay current with technology to provide a better living experience for our residents, such as keyless locks. The extended life cycles of the products incorporated in the new construction and renovated units have reduced turn costs and the resident’s living environment is healthier with wood laminate floors and better air filtration systems. Finally, the tax credit allocation cycles are more competitive, which makes business planning for small developers quite challenging.
Recent “a-ha!” moment:
I recently attended the Florida Housing Coalition’s Statewide Affordable Housing Conference where I met several representatives from the Florida Department of Elder Affairs. They offer many programs that help seniors age in place including on site education opportunities. I realized that I needed to expand our partnership opportunities to include other state agencies. We have a common mission to serve seniors and help them stay in their homes as long as possible.
If you could have access to any expert to get advice, who would it be and why?
It is difficult to name one expert since so many are required to be successful. I believe the professional advice from our accountants is critical, since they should be involved from the beginning pro forma to the final disposition. Many developers are just now realizing what the sale provisions in their partnership really mean. You cannot ignore your tax basis until year 15.
If you weren’t an affordable housing developer, what would you be?
We have a farm in Alabama where we have just started raising bees, so a beekeeper is a possibility. Also, I am very interested in engaged philanthropy. I am a founding member and Advisory Board chair of Social Venture Partners Tampa Bay (“SVP’). In addition to providing financial resources, SVP utilizes our member’s talents and professional expertise to help local nonprofits to build capacity.
What’s coming up next for you?
Preservation is our passion. We will pursue preservation opportunities in the 2015 tax credit round in Florida, while constantly looking to improve our existing portfolio.
Connect with Donna Kimura, deputy editor of Affordable Housing Finance, on Twitter @DKimura_AHF.