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August 6, 2021
CPP Acquires Affordable Housing Community in Sacramento

Community Preservation Partners (CPP) is investing $9.5 million to preserve an affordable housing community in Sacramento, California.

The national affordable housing developer announced that it has acquired Grand Ave Villa in the city’s Del Paso Heights neighborhood. Built in 1974, the 18-unit apartment complex is CPP’s smallest holding and its first community in Sacramento.

CPP plans to invest $9.5 million in total development costs to revitalize the property with substantial interior and exterior upgrades, enhanced security, and the construction of a new community building.

“Historically one of Sacramento’s poorest neighborhoods, Del Paso Heights has been gaining the attention of local stakeholders with planned efforts for revitalization to create more livable and sustainable communities,” said Anand Kannan, president at CPP. “By aligning with local city planners—and offering our experience, financial resources, and creativity—we’ve been able to acquire our smallest community yet and are excited to provide residents with much-needed upgrades and increased safety measures to enhance their quality of life.”

The five-building community consists of three one-bedroom, eight two-bedroom, and six three-bedroom units for residents earning less than 60% of the area median income. A one one-bedroom manager unit also sits within the property.

CPP is investing more than $200,000 per unit in renovations to deliver amenities typical of a market-rate community. Interior rehab efforts include replacement of windows, air-conditioning units, flooring, cabinets, countertops, appliances, and lighting. In addition to a newly constructed community building, outdoor spaces will be enhanced by a spacious tot lot, a dog run, and a barbecue area where residents can gather. ADA (Americans with Disabilities Act) units and ADA path of travel will also be updated as required by local jurisdictions.

The property has a project-based Section 8 Housing Assistance Payments contract covering all of the units and was eligible for a low-income housing tax credit (LIHTC) syndication. A tax credit application was submitted in March and closed at the end of July using 9% tax credit equity and a construction-to-permanent loan. Partners on this project include Banner Bank, WNC, Foundation for Affordable Housing, Paragon Affordable, and Institutional Property Advisors.

Since its founding in 2004, CPP has invested more than $2 billion into neighborhoods across the United States, keeping housing costs affordable for thousands of seniors, families, and individuals. Holding more than 11,000 low-income housing units in its asset portfolio, the award-winning firm continues to expand nationally with headquarters in Irvine, California, and Reston, Virginia.

Source: Affordable Housing Finance

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June 28, 2021
Seth Gellis, VP of CPP East, Featured in Interview with Authority Magazine

Authority Magazine’s Jason Hartman conducted an in-depth interview with CPP Senior Vice President Seth Gellis for its series, "How We Are Helping To Make Housing More Affordable." Read on to learn more about Seth, who heads up our Eastern Division, including some interesting stories, his favorite life lesson from Steve Jobs, and most importantly, why we believe preservation is the immediate solution for affordable housing.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

I was born in Indianapolis and lived there until my parents divorced. My mother and I, along with my grandmother, all moved to Florida, and we lived there until my grandmother passed away. We then moved to California to be closer to family. I was shaped by all of these events, but even more so by growing up in a single-parent household. Seeing my mother work so hard to make sure we had food and decent shelter really impacted my outlook on the world and my work ethic in general. I was taught to fight for what you need, be who you want to be, and stand up for those that need help.

I feel very fortunate to have had some really great mentors both personally and professionally. In college I was part of a fraternity, Lambda Chi Alpha. Most fraternities had a house, but ours did not. So, I went to raise money to buy one. Through those efforts I met some great people that liked the hustle I was putting into the endeavor. I had always liked the idea of real estate development and at that point, didn’t really know the differences between housing types.

My first foray into housing was working with the facilities team in my dormitory, which led to a job in leasing for a student housing community while I was going to school. That is where I really started running numbers and getting excited about real estate finance. Through the mentor relationships I had formed I was able to segue into real estate and worked as a runner/marketing associate for an industrial-focused brokerage shop until I graduated. While there, I found the financing and how the projects were put together more interesting than the listing and selling side, and that experience solidified that I should take the real estate development route instead of brokerage.

I landed in affordable housing after securing a position as a land acquisition analyst for Simpson Housing Solutions. There I rose up the ranks and met some really fantastic people, one in particular, Moe Mohanna, who became a lifelong friend and mentor. He entrusted me to take on whatever I could put together so long as we were always treating people the right way and being fair in our dealings. I guess you can say I got hooked on the deals but as I learned more about the people we were helping, the work became even more exciting.

There is simply nothing better than doing for others and being rewarded for your efforts in doing so. Our team motto, “do the right thing, always,” started during my time at Simpson Housing and I’ve carried it throughout my career. I’ve been incredibly fortunate to have opportunities that others may not have had, and that’s why it’s important for me to give back. At CPP, along with its parent company, WNC, the leadership team fosters a people-first mentality, and we truly live it. CPP President Anand Kannan has pushed CPP to become a national presence, and like Moe, very much believes in doing the right thing, always. It’s a guiding principle that has led to our collective success and why we work so well together.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Stay Hungry, Stay Foolish.” — Steve Jobs

This quote is especially relevant in my work at CPP. As a mission-based developer, we are continually looking for opportunities to make a difference for our sellers, partners and the residents whose lives we can positively impact. This quote resonates in many ways:

Housing in general lacks innovation, and being foolish to me means looking for the less-obvious way to make a deal happen. Often times it takes creativity and a solution-oriented mindset.

When it comes to underwriting, relentlessly pushing for the next housing opportunity and overcoming the next obstacle to creating housing, without regard for how you previously transacted, keeps you fresh and gives you an advantage.

Financial products are constantly changing. In the environment we operate in, we want to be first and we want to find ways to make things work for everyone, which ultimately results in getting deals done that others may not have believed in.

Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from?

To make a long and complicated issue as simple as possible, I believe our housing crisis stems from inappropriate land use policies that have been in place for a very long time, combined with ramped NIMBYism and bureaucracy controlling the process.

The real way out of this is to encourage the creation and preservation of as many housing units and types as possible. Increased supply, so long as we don’t lose supply, will drive down or stabilize rents.

Preservation happens to be a lot more efficient than new construction due in large part to the minimum construction requirements that most agencies require. The result is much higher costs to construct affordable housing than market-rate housing. The answer is complicated but begins with stopping the bleeding and keeping the housing we have for as long as possible. Encourage this at all costs — not only is it less costly than replacing the housing, it also is preserving housing located in irreplaceable locations that serve an existing community.

Uncertainty for housing developers becomes a barrier for preservation and new construction, so cities and counties should look hard at their PILOT and tax abatement programs and codify them whenever possible to benefit the preservation or creation of affordable and workforce housing. This will give an advantage to affordable housing developers and a reason for sellers of existing communities and/or land to provide the time needed for an affordable housing community to become a reality.

Once you stop the bleeding, create more certainty in underwriting so you can then focus on the barriers and processes limiting or delaying the creation of new supply. These include entitlements, impact fees, and plan review processes that include lengthy environmental reviews in some states. These processes allow the opposition to control the outcome of proposed affordable developments with irrational fear. Reviews by state agencies, in some states, can lengthen the process even further beyond what market-rate developers face. To the extent affordable housing can become by right in the approval process, we benefit by shortening the approval process and creating certainty in new supply. From a seller’s perspective, certainty of a quick execution might be enough for them to choose an affordable developer over a market-rate developer.

It is worth noting that there are states that have recognized this issue of uncertainty and NIMBYism. Unfortunately, they have mixed public policy goals when addressing the issue and mix certainty and streamlined processes with prevailing wage requirements. This solves one problem but substitutes it for driving up costs, still limiting how many units can be produced.

There is also opportunity for states agencies to take a hard look at their scoring, minimum construction requirements, and QAPs, and ask themselves if they are encouraging the greatest number of units being preserved and created or, are there other noble causes being placed ahead of the housing goal itself. If they are a housing agency, I argue that housing should always be the lead priority over other public policy initiatives.

If a state isn’t using all of its volume cap for 4% tax credit and bond deals, it should take a look at why it can’t put its volume cap to use. I guarantee you the answer is not a lack of available projects; it more likely lies with the projects that score under their QAP, or the systems, timing and processes that limit the ability to produce, enhance and protect housing.

Housing is a basic human need and I believe that all of us in the housing industry should focus first on housing and then on the other benefits that we can provide through it to society. The fact is that there are always competing public policy objectives and goals that have to be balanced responsibly. The core of why the housing gap continues to get worse is that as an industry we continue to create advantages for producing new construction market-rate housing over affordable housing, yet still continue to make the production of housing costly, uncertain and time consuming in general.

Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?

I’m extremely proud of the placemaking and lives that we are positively changing in some of the properties we have invested in that previously were known as high-crime neighborhoods. From seeing children play in the playgrounds and use the services we install, to the seniors who come out and find comfort in our courtyards, I can’t help but feel like we are doing the right thing, and that we are providing opportunity and housing security where it is needed most. As a brand that is mission-driven, it is gratifying to see our creativity, performance and purpose come to life at each of the communities in which we invest.

For example, our community Winton Garden Towers in Rochester, New York earned a Multi-Housing News 2020 Excellence Award in the Transaction of the Year category and reflects the innovative financing, creativity, and positive impact that CPP strives for with each of its neighborhoods. CPP, with our partner Rochester’s Cornerstone Group, rehabilitated the 206-unit Winton Garden Towers, a community that once had a poor reputation marred by major problems of crime, drugs and physical neglect. Despite the myriad challenges, CPP saw an opportunity to enhance the quality of life for these residents and turn the towers into a beacon of light for the community. We completely transformed both the exterior and interiors, and closely worked with law enforcement and neighborhood groups to ensure everyone felt safe in their new homes. It truly is a Different Way to Home.

Read the full interview with Seth Gellis:

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June 1, 2021
CPP Housing Invests $12.3M to Preserve, Revitalize Family-Oriented Community in Bedford County, Tennessee

Community Preservation Partners (CPP Housing), a national affordable housing developer committed to creativity, performance and purpose, today announced the acquisition of Bedford Manor Apartments in Shelbyville, Tennessee for $6.1 million. Built in 1968, the 108-unit multifamily community is home to more than 230 Bedford County residents who will receive a long-overdue remodel of their interior units, as well as extensive exterior improvements and security enhancements. CPP also plans to provide residential services such as health and wellness classes, financial literacy and food programs. Construction begins this month and is expected to finish in January 2022.

“We are excited to start making a difference in Tennessee by acquiring our first affordable housing community in the state,” said Seth Gellis, senior vice president, eastern division, CPP. “Ensuring people have a safe and secure place to call home is one of our core pillars at CPP, and we have big plans to help ensure this is felt by the residents at Bedford Manor.”

The 10-building community consists of 18 one-bedroom, 60 two-bedroom and 30 three-bedroom units for residents earning less than 50% of the area’s median income. CPP is investing $12.3 million to renovate the property to include amenities typical of a market rate community. Interior renovations include new flooring, cabinets, countertops, appliances and lighting. Exterior improvements will be made to the roofing, HVAC system, windows, lighting, and security cameras. ADA units and ADA path of travel will also be updated as required by local jurisdictions.

“At CPP, we are mission-driven and committed to enriching lives and strengthening communities by working closely with local partners and listening to residents’ needs,” said Anand Kannan, president, CPP. “With offices on both U.S. coasts, we have the experience and resources that enable us to deploy practical solutions to complex challenges that underpin our nation’s affordable housing crisis so that people continue to have the fundamental right to equitable, vibrant and affordable housing.”

CPP continues its aggressive growth initiative to expand its footprint across the country. Communities recently closed in the U.S. have led the company to deepen the affordability of neighborhoods across Colorado, Utah, Montana, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Tennessee, Connecticut and Virginia, in addition to its long history of providing affordable housing solutions across the state of California.

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May 25, 2021
Winton Gardens Towers – Silver MHN Award Winner for best transaction (Multi-Housing News)

Community Preservation Partners (CPP) is proud to have been recognized twice by the Multi-Housing News 2020 Excellence Awards, bringing home Silver awards in both the “Development Company of the Year” and “Transaction of the Year” categories. The MHN Excellence Awards recognize the best projects, people and transactions in the multifamily housing industry, with winners chosen by a panel of judges from across the field’s many disciplines. The competition this year was especially fierce, which made CPP’s dual recognition stand out.

“We received a record number of submissions to the Excellence Awards this year, including many high-quality entries, which made it challenging for our judging panel of highly experienced industry players to narrow down the best candidates,” said Suzann Silverman, editorial director at Commercial Property Executive and Multi-Housing News. “Winning not one but two Silver awards is quite an achievement.”

CPP received its honor in the Development Company of the Year category in recognition of an abundance of quality work done in 2019.  The company conducted more than 1,600 affordable housing rehabilitations, reached a milestone of $2 billion invested toward affordable housing and undertook its largest rehabilitation yet (and the largest reported in the country that year): a $420 million overhaul of the 700-unit El Rancho Verde multifamily community in San Jose, California.

The company was also recognized in part due to its commitment to working with local developers, nonprofits, service providers and housing authorities to transform the lives of the residents in its communities. Thanks to its ability to leverage a variety of resources, CPP gets deals done quickly and efficiently, closing even complex deals in as fast as 60 days and combining as many as 12 individual sites in a single financing.

In the Transaction of the Year category, CPP received high marks for its rehabilitation of the 206-unit Winton Gardens Towers in Rochester, New York. Once known as Cedarwood Towers, the community had a poor reputation and was marred by major problems with crime, drugs and physical neglect. Despite these myriad issues, CPP saw an opportunity to turn the towers into a beacon of light for the community. This was achieved through a complete transformation both inside and out, aided by close work with police and neighborhood groups to make sure everyone felt safe in their new home.

Today, Winton Gardens Towers stand as a community that its residents can be proud of. The complete transformation has been marked by twin color-changing LED projection lights along both towers, along with the rebirth of a beloved historic garden on the grounds.

“We are honored to receive these awards and are particularly gratified because they so well encapsulate CPP’s mission,” said CPP President Anand Kannan. “Our team is laser-focused on enhancing the quality of life for residents in all of our communities. We wish to thank MHN and the award judges for this wonderful validation of our efforts.”

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August 7, 2020
L+M, Community Preservation Partners Undertake $123 Million Rehab of South Orange Complex

L+M Development Partners and Community Preservation Partners (CPP) have acquired an affordable housing in East Orange, New Jersey, for $94 million, with plans to invest $29 million to rehabilitate it.

L+M Development, based in Larchmont, New York, and Community Preservation Partners, headquartered in Irvine, California, in a joint venture have purchased the 406-unit Norman Towers at 500 N. Walnut St., the companies said in a statement. It represents the first rehab project that Community Preservation Partners, a national affordable housing developer, has undertaken in the Garden State.

Norman Towers was built in 1980 and has not received any major renovations since the original construction. Affordable housing mandates for the property were set to expire in 10 years, but will now be extended for 50 years as part of the purchase agreement. ‘We’re proud to add another state to our growing Eastern portfolio and the Norman Towers project is a great way to make our New Jersey debut," CPP Vice President Seth Gellis said in a statement. ‘In keeping with our mission of enriching lives and strengthening neighborhoods, we’re giving the Norman Towers a complete face-lift in addition to new amenities and community activity areas to revitalize the quality of life for the senior residents."

The planned improvements for individual apartments include energy-efficient appliances and upgrades such as new cabinets and counter tops. Community Preservation Partners also plans enhancements to indoors and outdoor common areas, including an expansion of the community room and the remodeling of additional spaces, a new computer room and fitness center, as well as new landscaping, lighting, built-in BBQs and outdoor-dining areas. The renovation is expected to be completed in two years.

“Much of our work in Northern New Jersey is focused not just on the revitalizing properties but also ensuring that those living in them can remain in their homes,” Jeffery Moelis, L+M Partners’ managing director of preservation, said in a statement. “We are proud to work with CPP as well as our government and financial partners, including the City of East Orange, the New Jersey Housing and Mortgage Finance Agency, Freddie Mac, HUD, and Wells Fargo to deliver essential upgrades and preserve affordability for seniors at Norman Towers.”

Source: Costar News

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July 1, 2020
$24.5M rehabilitation of Lawrence Avenue Apartments in Potsdam now complete

POTSDAM -- Less than a year after acquiring the 137-unit Lawrence Avenue Apartments in Potsdam, Community Preservation Partners (CPP) has completed its $24.5M rehabilitation of the property. At the time CPP acquired the community, 20 of the dwellings had been in ruins for months following a fire. "We're very pleased to continue our momentum in both New York and the eastern U.S. with this rehabilitation," said Seth Gellis, CPP vice president. "To go from apartments ruined by fire to beautiful, modern homes that offer long-term affordability ensures the Lawrence Avenue Apartments will be a valuable part of the community for decades to come.""We were pleased to work with the professionals at CPP who ensured that several local contractors were used to preserve and rejuvenate the Lawrence Avenue Apartments," said Patrick Kelly. CEO, St. Lawrence County Industrial Development Agency, a public benefit corporation that assisted in securing tax-exempt bonds for the project. "We appreciate their ability to get the project done smoothly and deliver real benefit to the community."In addition to the renovations, the property’s recapitalization has opened the homes to lower income residents, including those with area median incomes at or below 60 percent of the greater Potsdam area.

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