A Tale of Two Cities:Multi-phase Acquisition / ResyndicationCase StudiesF E B R U A R Y 2 2 , 2 0 1 7

C L A U D I A B R OD I E , S E N I O R V I C E - P R ES I D EN T , M C C O R M AC K B A R O N S A L AZ AR , I NC .

D A N I E L M . R O SE N, F O UN DI N G P A R T NE R , K L E I N H O R N I G , L L P

Who is McCormack Baron Salazar?

191 Projects | 20,000+ Homes

$3.7 Billion Invested

45+ Years1.44

million sf of commercial

22 States

2 Territories + D.C.

45 cities

900+ Employees

Who is Klein Hornig?

National Practice

www.kleinhornig.com

33 AttorneysBOSTONlocation

DC location

Firm Focus:Structuring, managing and closing affordable housing and community development projects

Who is Klein Hornig?

New Markets Tax Credits| Historic and Renewable Energy Credits

Community Development | Affordable HousingCommercial and Mixed Use

LIHTCPHA

Mixed-Finance

HOPE VICNIRAD

FHA insured LoansMark-to-Market

Section 236 Recoupling

HOME CDBG

Tax-exempt Mortgage Revenue Bonds

501(c) (3) Bonds

Case Study: Crawford RobertsPittsburgh, PA

Crawford Square

A City and Community on the Rise

Downtown has seen a tremendous amount of public and private investment in the past decade. From January 2006 through September 2016 alone, over $7.48 billion worth of investment projects have been completed, are actively under construction, or have been announced in Greater Downtown.

The Hill 1991 to 2006

About the Hill District

7 Phases | 863 Homes

$122 Million Invested by MBS

Since 1991

56Homeownership

108 Senior

Apartments

699 Family

Apartments

1Revitalized Community

Crawford Square Site Plan - Unchanged

http://www.post-gazette.com/business/development/2016/01/28/Peduto-strikes-deal-to-save-affordable-housing-at-Crawford-Square/stories/201601280116

Crawford Square Acquisition / Resyndication: Uses

One Phase346 Residential Units

152 Market | 194 LIHTC: 134>60%; 60<50%

Three Phases348 Residential Units

154 Market | 194 LIHTC: 147>60%; 47<50%

Crawford Square Acquisition / Resyndication: Sources

One Phase346 Residential Units

152 Market | 194 LIHTC: 134>60%; 60<50%

Three Phases348 Residential Units

154 Market | 194 LIHTC: 147>60%; 47<50%

Three Phases348 Residential Units

154 Market | 194 LIHTC: 147>60%; 47<50%

• Investor Exit from all 3 Partnerships

• No Real Estate Transfer (Transfer Taxes, Ten Year Rule)

• New 1st Mortgage Loan $13,000,000 (Bridge)

• New 2nd Mortgage Loan $6,000,000 (HACP -- Permanent)

• No Modification of Existing $16,000,000 Debt (Timing Question –OID/COD? True Debt Concerns Later?)

One Phase346 Residential Units

152 Market | 194 LIHTC: 134>60%; 60<50%

• Real Estate Transfer –New Entity to Purchase all 3

• New 1st Mortgage Loan $25,100,000

• Modification of Existing $16,000,000 Debt: Assumed by new owner, extend maturity, interest @ AFR

vOccupancy•Unit turns•Host Units

vFiscal Health•Managing DSC with existing lenders –three phases alone and roll up

vMessaging•Residents and Relocation- checkerboard•Construction •Owner/lender

Operations and Management Considerations

O’Fallon Place – The Other City

PittsburghM

SA R

ank

Popu

latio

n (2

015

Estim

ate)

% C

hang

e (fr

om

2010

Cen

sus)

Med

ian

Inco

me

Pove

rtyRa

te

Cou

nty

Pove

rty R

ate

Unem

ploy

men

t Ra

te

25 304,391 -0.43% 40,715 22.9% 12.0% 5.2%

20 315,685 -1.1% 35,559 25.5% 10.3% 4.0%

323,127,513 4.7% 53,889 13.5% 13.5% 4.9%

St. Louis

USA

The Near North Side: A Marginalized Neighborhood

6,000 units of Public Housing in one neighborhood…

Existing Site Plan & Ownership

RENOVATION DEMOLITION

Strategic Demolition and Renovation

O’Fallon Place – here we come…

Preservation Square Acquisition / Resyndication: Uses

Five Phases555 Residential Units120 Moved Off Site

Four Phases Overlaid into Two Phases

675 Residential Units

Preservation Square Acquisition / Resyndication: Sources

Five Phases555 Residential Units120 Moved Off Site

Four Phases Overlaid into Two Phases

675 Residential Units

Preservation Square Current Structure

THE VISION

Take Aways: Sources Per Unit

Take Aways: Uses Per Unit

Questions?F E B R U A R Y 2 2 , 2 0 1 7

C L A U D I A B R OD I E , S E N I O R V I C E - P R ES I D EN T , M C C O R M AC K B A R O N S A L AZ AR , I NC .

D A N I E L M . R O SE N, F O UN DI N G P A R T NE R , K L E I N H O R N I G , L L P