Steve Rappin is CEO of Evergreen Real Estate Group, a growing Chicago-based firm that develops, acquires, and manages affordable and market-rate multifamily communities.
He shares what he’s working on, his advice for others, and who he would invite to a dinner party.
Evergreen is involved in different types of real estate development. How much of your work is in affordable housing?
The vast majority of Evergreen’s business is the development and preservation of affordable housing. Our business has grown from nine properties in 2001 to 80 properties in 2018 across 10 states. Ninety percent of Evergreen’s units are affordable. Going forward Evergreen is committed to finding creative solutions to increase and preserve the stock of much-needed affordable housing. Evergreen also owns and manages traditional, market-rate family apartments and develops both market-rate and affordable assisted-living and memory-care facilities.
How is your affordable housing business changing?
In recent years, we have increased our focus on adaptive-reuse of historic buildings and new construction mixed-use affordable housing projects. Additionally, with the decrease in “soft funds” from government agencies there has been a need to identify creative, alternative financing sources. Evergreen used a temporary River Edge Historic Tax Credit to help finance the conversion on a 1920s Art Deco hospital into 60 units of senior affordable housing in Aurora, Ill. We used historic tax credits to convert a 1920s ice cream factory in Milwaukee into family affordable housing and are currently developing two ground-up libraries in Chicago with 40 units each of affordable senior housing on the top floors in partnership with the city of Chicago and the Chicago Housing Authority.
Tell us about an affordable housing project that you’re working on.
Evergreen has a long history of working with non-for-profit entities as a development partner and manager of their affordable housing properties. Though Evergreen is a for-profit company, we consider ourselves to have a nonprofit mentality when caring for residents. Evergreen is currently partnering with a number of not-for-profit groups, including Naperville Elderly Homes (NEH), whose mission is to provide affordable housing for seniors in the Chicago suburb of Naperville, Ill. Currently, we are rehabilitating NEH’s existing 122-unit elderly Sec. 8 property as well as building 68 new units of affordable housing utilizing both 9% and 4% low-income housing tax credits in partnership with Illinois Housing Development Authority. This project will improve the lives of 188 seniors who otherwise would not be able to live in Naperville.
If you could add any amenity to your affordable housing developments, what would it be and why?
It would be to add social services to ALL of Evergreen’s affordable properties. It is one thing to provide safe, affordable housing, but also seems an obligation to provide much-needed services to enhance residents’ lives. Currently, many of Evergreen’s senior properties have social service coordinators, mainly through grants from the Department of Housing and Urban Development. This give seniors the needed financial, medical, and daily-living services they need to thrive. Unfortunately, most of our family properties cannot afford such services. So, Evergreen has partnered with a non-for-profit agency, Housing and Human Development, to start providing these much-needed services at our family properties.
What’s a recent move that Evergreen has made that other developers can learn from?
We have purposely evolved into a fully integrated affordable housing company. I see this as a real advantage. Evergreen has established best-in-class property management, development, and construction teams. These teams work synergistically early on in the development process to identify “killer” issues, ensure proper financial assumption, and design a finished product that not only meets today’s needs of our valued residents but operates efficiently in the long run. This also greatly improves the chances of the projects coming in on time and on budget.
As CEO, what issue have you been spending the most time on this year?
Setting Evergreen up to handle greater scale via strategy and organizational structure. People, process, and a good strategic plan truly make the difference. As CEO, it is my primary responsibility to make sure all of the business units have strong leadership, clear priorities, and a strong sense of the role they play in the broader organization. Evergreen’s competitive advantage is being a small, entrepreneurial organization with empowered leaders that are driven toward a common goal. Over the past year, the leadership team and I have spent a lot of time setting the organization up for scale and with long-term enterprise value to help us reach our vision of being the Midwest’s premier affordable housing company.
What are your plans for the company in 2019?
2018 has been a year of setting Evergreen up for scale. 2019 will be a year of growth when we anticipate approaching 10,000 units in property management, having 10 to 12 affordable projects in the development cycle, and achieving nearly $40 million in construction. I can also envision the potential acquisition of a property management company as our business spreads nationally.
What does Evergreen do better now than a year ago?
Retain employees via positive company culture. Evergreen has grown significantly, but we have worked to retain a family company feel for our 350 employees. This is critical in a tight job market. Evergreen has added programs such as summer hours, EvergreenCares (a program that encourages employees to take days off to volunteer at local charities of their choice), the High Five Program that recognizes and rewards employees “above and beyond” contributions, and the Evergreen scholarship program that provides tuition gifts for Evergreen employees.
Share a pivotal moment in your career.
Leaving the corporate world to join my father at Evergreen. I knew little about real estate but had a pretty good general management pedigree. The lure of being a partner in a smaller, more entrepreneurial company and the opportunity to partner with my father was too good to pass up. We have very complementary skill sets and using a framework of business fundamentals surrounding an entrepreneurial core has really driven our success.
Best advice that you’ve received:
Treat others as you want to be treated.
Advice for others in the industry:
To always remember it’s ultimately about improving the lives of our residents.
If you could invite anyone to a dinner party, who would be on the guest list?
Warren Buffett (business fundamentals), Elon Musk (visionary for disruptive technology), Michael Jordan ( “Just Do It” attitude), Melinda Gates (how to give), Sonia Sotomayor (lived in affordable housing), and Lady Gaga (creative genius).
I can do a pretty good cartwheel.
What’s next for Steve Rappin?
Continuing to partner with Evergreen’s leadership team to reach our vision to be recognized as the Midwest’s premier affordable housing company. Partnering with my wife to raise three incredible kids. Eating lots of kale, going to lots of concerts, and traveling the world.