The pieces are coming together at April Housing.
Seven months after its launch, the company has added key members to its executive team, moved toward making its first low-income housing tax credit (LIHTC) investment, withdrawn a qualified contract, and resolved two court cases that it had inherited.
April Housing, a Blackstone Real Estate portfolio company (NYSE:BX), was established to create and preserve affordable housing with an initial portfolio of more than 90,000 LIHTC units that were acquired by Blackstone Real Estate Trust (BREIT) from American International Group (AIG) and The Cornerstone Group.
“We want to grow our portfolio,” CEO Alice Carr tells Affordable Housing Finance. “We aim to be a best-in-class owner and operator, bringing new resources to the industry and serving as a thought leader.”
An affordable housing industry veteran, Carr was named to lead the new company after serving as head of community development banking at JPMorgan Chase.
She’s recently brought on several other “industry lifers” to her team.
In its latest move, the company has appointed Perica Bell as head of preservation to lead its strategy and execution of protecting affordable housing in the portfolio. She joins April Housing from MUFG Union Bank, where she was head of LIHTC equity and debt originations and led the bank’s Community Development Finance group. Earlier, Bell worked at Jamboree Housing, managing the acquisition, financing, and stabilization of affordable housing developments.
“Preservation is key to the mission of this company,” Carr says. “I don’t know a lot of affordable housing companies that have a head of preservation. We have a big portfolio that has preservation needs, and there is a mixed bag of preservation tools that are out there. It varies from state to state and locality by locality. We want to be at the table talking about the different tools available for preservation and expanding the repertoire, and Perica will help us do that.”
The nearly 700 developments in the firm’s portfolio have an average of 20 years of affordability remaining, but the restrictions on some assets will be expiring sooner, prompting the company to start planning now.
Other recent appointments include:
· Ben Finley, as managing director and head of transactions, overseeing all aspects of April Housing’s capital transactions. He was previously president of Richman Community Capital, leading all investment efforts in affordable and workforce housing;
· Louise Nelson, as general counsel and head of ESG. She most recently served as chief legal officer for UCLA and previously spent 16 years in senior roles on the legal team of Hilton Worldwide, including advising on corporate responsibility initiatives;
· Keosha Burns, as head of communications, overseeing all internal and external communications for April Housing. Burns was previously chief of staff for the Community and Affordable Lending team at JPMorgan Chase;
· Jana Barbe, as senior adviser. Barbe spent 25 years as a partner at Dentons law firm, where she represented financial institutions and insurance companies in connection with their affordable housing and community development investment programs; and
· Naveen Agrawal, as vice president of capital markets. He is focused on debt originations and refinancing across the portfolio. He brings a breadth of experience across affordable housing and a deep knowledge of available financing tools in the industry. He previously supported debt and equity originations for a nationwide LIHTC portfolio of over 10,000 units.
Carr plans to continue to grow the portfolio through acquisitions, including LIHTC and workforce housing properties. At the same time, April Housing will likely look to sell certain non-core assets and work with partners interested in liquidity.
April Housing is the outright owners on the majority of the portfolio, by value, and is a limited partner on the remainder.
Carr expects the firm to move increasingly in the direction of outright ownership as it works through the portfolio, which may mean selling to or buying out the general partners in those assets. “That’s a long-term view, but it will take time,” she says.
As part of BREIT, the new business has a longer-tenure, perpetual capital structure that fits well with the affordable housing asset class, according to Carr.
April Housing is exploring providing LIHTC equity to support new developments and rehabbing existing affordable units. It’s likely that the firm will build out a broader investment platform, but exactly what that will look like remains to be seen.
“We are going to bring new capital and resources to the sector,” Carr says. “We want to be efficient and figure out what the sector needs most. LIHTC equity is one way to bring capital to the industry, but we want to be innovative, and there are other ways that we can bring capital to the industry outside of the housing tax credit space.”
In its first several months, April Housing has worked to resolve two court cases involving nonprofits and the right of first refusal issue that it had inherited from its acquisition of the AIG portfolio.
“We feel encouraged about being able to settle these cases and showing that we support nonprofits,” Carr says.
In another case, April Housing withdrew an application for a qualified contract submitted by the prior owner of the Missouri property. With this step, April Housing is ensuring the long-term affordability at the 238-unit development.
The entry of large corporations like Blackstone into the affordable housing space has raised some concerns that these firms will convert affordable developments into market-rate housing.
Carr stresses that April Housing is dedicated to preserving affordable housing for the long term.
“The country faces a preservation challenge,” she says. “There’s not a consistent and complete arsenal of products for preservation. There are a lot of LIHTC projects that will come to the end of their restricted periods in the next 10 to 15 years. It’s an issue that the country needs to focus on, and that’s our focus. We are committed to preservation.”