Community Preservation Partners (CPP), a mission-driven affordable housing preservation developer, today announced its acquisition of the Smith-Beretania Apartments in Honolulu, a 22-floor high-rise affordable housing complex that houses 164 one- and two-bedroom units, all of which receive subsidy under a Section-8 HAP contract. CPP partnered with local lenders, BlackSand Capital, a Hawaii real estate private equity firm, and Bank of Hawaii to finance the property acquisition, in addition to working with Hawaii affordable housing specialist Ahe Group. Now under CPP ownership, future renovations to the Smith-Beretania Apartments will be financed through the low-income housing tax credit program, which will preserve its affordable housing designation for future decades.
“At CPP, we believe that working with local community partners is essential in bringing about affordable housing projects that make the residents and community proud,” said Anand Kannan, president at CPP. “By working closely with BlackSand Capital, Bank of Hawaii and Ahe Group, we were able to execute the deal efficiently and preserve affordable housing for more than 300 residents in a high-cost market. We are looking forward to providing a modern renovation, enhancing social services and building a sense of community for the residents that will last for years to come.”
“CPP didn’t assume they knew our local community. Instead, they paired their extensive expertise in affordable housing with our intimate knowledge of and commitment to Hawaii,” said B.J. Kobayashi, chairman and CEO at BlackSand Capital. “Preserving existing affordable housing in high-cost markets is very important to maintaining communities and ensuring that people have access to adequate and affordable housing; BlackSand Capital is proud to be part of this much-needed affordable housing effort right in our own backyard.”
There is an urgent need for preserving Hawaii’s affordable housing inventory, especially given the median asking rent on Oahu has risen to $2,100, up from $1,700 within the last year, with Honolulu specifically seeing a 3.9% rise in rent. Many families spend more than 30% of their household income on housing, and with the increasing cost of food and energy, some 10% to 14% of Oahu households are late on rent each month, according to U.S. census surveys as reported by the University of Hawaii Economic Research Organization. [i]
CPP will work with Hawaii-based business partners to invest nearly $10 million to rehabilitate the complex, with renovations to include exterior paint, unit turns, energy efficiency improvements, accessibility upgrades and site amenity updates. In addition to the 164 units of affordable housing, the half-acre lot offers a community room, onsite management, laundry facilities, controlled access entry and dedicated parking in the adjacent parking structure. Additionally, the site provides access to a public park with a playground, basketball court, pet parkand open green space.
About Community Preservation Partners
Since its founding in 2004, Community Preservation Partners (CPP), an affordable housing rehabilitation company, has invested more than $2.6 billion into neighborhoods across the United States, keeping housing costs affordable for thousands of seniors, families and individuals. Having developed more than 12,500 low-income housing units, and positively changing the lives of thousands of low-income residents, the award-winning firm continues to expand nationally with headquarters in Irvine, California and Reston, Virginia. With its creative mindset and unwavering vision, CPP Housing proposes big, bold and better solutions that build community and serve the greater good. Creativity. Performance. Purpose. A different way to home. For more information, visit www.cpp-housing.com and follow us on LinkedIn.
About BlackSand Capital
BlackSand Capital is a Hawai‘i specialist private equity firm distinguished by its integrity, creativity, and intimate knowledge of and commitment to the Hawai‘i market. It stands out as the only Hawai‘i-focused real estate private equity firm.
BlackSand Capital’s advantage is its focus on the local community, which is also reflected in the company. BlackSand Capital is a diverse and inclusive minority-led company led by women and men who are committed to these principles. All of BlackSand Capital’s employees are part of local families and have strong ties to Hawai‘i.
BlackSand Capital’s deep foundation in Hawai‘i rises from a multi-generational family legacy in the Hawai‘i real estate and construction industries. The relationships created by decades of professional partnerships refine the firm’s acute understanding of real estate fundamentals and underpin its ethical responsibility to the community. These enduring relationships along with the diversity and depth of experiences allow BlackSand Capital to capture rare opportunities often not presented in the market.
BlackSandCapital and its principals have overseen the investment of approximately $5 billion in Hawai‘i properties, including investments in workforce housing, hotels, residential condominiums, and retail, office and industrial buildings. For more information, visit www.blacksandcapital.com
[i] Honolulu Civil Beat -- https://www.civilbeat.org/2021/09/hawaiis-high-cost-of-living-just-keeps-getting-higher/
Originally published on Forbes Business Councils by Seth Gellis, President of CPP.
With the continued urgent need for more affordable housing across the country, industry experts and academics are looking for solutions, whether they involve preserving existing communities nationwide or creating additional units where they are needed most.
According to a recent study by the National Low Income Housing Coalition, there is a shortage of 7.3 million available affordable rental homes for the lowest-income renters in the U.S. While it’s a complex issue, one overlooked path to financing is the option to increase the use of private activity bonds (PABs), which pair with 4% low-income housing tax credits (LIHTCs).
Volume cap, a “use it or lose it” resource provided by the federal government to the states based on a per capita formula, allows tax-exempt financing to be issued for affordable housing at a lower interest rate. The lower interest rates offset the lower net operating income that debt is sized from as a tool to help keep project sources and uses in balance. This ensures a greater level of capitalization, reducing the need for other sources and increasing the funding available for construction activity.
This important resource is allocated and awarded by state finance agencies, some of which unfortunately do not use all the resources made available to them. This means that if a state agency has unused volume cap and a deal is unable to make it through the funding cycle for that state in a timely manner, the resource and accompanying economic and social benefits are lost for good.
So, what can affordable housing professionals and organizations do to ensure the volume cap does not go to waste or to use it in the most efficient manner possible?
One solution is to work with local bond issuers and agencies that support them.
Local bond issuers play a major role in identifying the projects most impactful for their community and often can reduce the overburdened load that housing agency staff must deal with.
At my company, we find that an average deal may take nine months to close, plus an additional year to complete the development or preservation of the property (with a few more months of time tagged on for an IRS Form 8609 to be issued). We consider that a quick turnaround. But when entities do not use a local issuer for the deal, the acquisition or renovation timeline can extend for an additional one and a half to two years—sometimes making the deal untenable.
Across the U.S., many affordable properties are in immediate need of preservation; and many of these deals use LIHTC as a part of their financing. Completing these deals as quickly as possible is integral to reducing the loss of affordable units and preserving options for communities.
According to a 2024 report from Harvard’s Joint Center for Housing Studies (JCHS), there was a loss of 2.1 million units with rents below the maximum amount affordable for the lowest income group since 2012. While creating new affordable housing units is a part of the solution, new construction alone won't be able to keep up with the need, especially if communities are losing more units than are being created.
I've found that when local leaders, community advocates, developers, lenders and agencies can work together, it creates efficiencies and the strongest outcomes in affordable housing development and preservation. Communities should have a say in their local housing choices. Local leaders and community advocates have the best understanding of residents’ needs and where and how to invest, and good developers will listen.
Working with local issuers increases the ability for local jurisdictions to control the terms and circumstances that preservation or new development must follow in addition to minimum state provided standards. When deals and terms are localized, it creates the largest impact for the community. Specific benefits may include:
• The community is empowered to decide the priorities they wish to address. Developers should foster dialogue with local housing advocates and community leaders to discuss and outline their wish list. Unsurprisingly, the goals are often the same.
• Related improvement projects (e.g., street, sewer, LEED), social service requirements, crime prevention programs, prevailing wage, are benefits that are, by and large, staying within their community (should they choose). This autonomy also relieves pressure on developers by having an equal partner in the myriad decisions.
• Locals control within the development what is done, where it’s done and who does it within the community. For example, they may have checklists or requirements (e.g., Section 3 that requires a local workforce) that directly benefit the local community and economy.
Affordable housing developers looking to finance their deals may have the opportunity to work with a local issuer to get the deal done. I recommend you keep these best practices in mind:
Just like when working with any financial partner, organization is paramount. As a developer, that means having the deal structure solidified, financial documents in place and a single point of contact for the local issuer identified. The more streamlined you can make the process, the better.
Developers likely understand that one of the key benefits of working with a local issuer is the ability to help impact the local community in specific ways. But, for that impact to be felt in the biggest way, developers must take the time to truly understand the local community and its needs.
Developers need to reach out early in the process to understand if the issuer has sufficient volume cap, and what their processes may be. Creating a relationship early makes the processing, organization and understanding of their needs much easier.
Ultimately, the ability to work with local agencies carries many benefits and can make developers and investors nimbler in their work solving the nation’s affordable housing crisis.
CPP, a mission-driven affordable housing preservation developer, has announced the acquisition and planned renovation of Lexington Green Apartments, an affordable housing complex in El Cajon, Calif. CPP partnered with co-developer The Hampstead Companies on the deal. This is the second community in El Cajon for CPP, joining Park Villa Apartments.
Lexington Green Apartments is located in a primarily residential neighborhood two miles east of downtown El Cajon, which sits 17 miles east of downtown San Diego. Originally built in 1970, the property last underwent a tax credit renovation in 2007, which replaced some, but not all, original building systems. The property consists of 144 units, spread across 12 two-story residential buildings. CPP’s total development investment is approximately $80,000,000, which includes the purchase price of $52,880,000 and estimated renovation costs exceeding $80,000 per unit.
“Lexington Green Apartments aligns with one of CPP's core philosophies of strengthening cornerstone communities in the neighborhood while extending the affordability of the community,” said Evan Cramer, Assistant Development Manager at CPP. “We hope to accentuate the feeling of pride that Lexington Green's residents have for their community while providing the physical upgrades necessary to ensure the property remains a prominent piece of the community for many years to come.”
The renovation will exceed the 10% energy savings requirement from the California Tax Credit Allocation Committee (CTCAC) through the replacement of all windows with energy efficient vinyl retrofit windows, water heaters, Energy Star appliances, and energy efficient LED light fixtures.
“At Lexington Green, incorporating green, energy-saving appliances and fixtures allows us to weave sustainability into the residents’ daily lives and helps further our goal to create a more sustainable future,” John Fraser, Vice President CPP – East.
Additional upgrades will include dryrot repairs, flooring replacement, new cabinets and countertops. ADA-complaint upgrades will be made for units and path of travel throughout the property.
CPP and The Hampstead Companies are partnering with LifeSTEPS to provide instructor-led adult educational classes including financial literacy, computer training, resume building, nutrition, exercise, parenting, and more. LifeSTEPS will also provide individualized health and wellness services and programs such as crisis intervention, practical counseling and emotional support, physical and mental health assessments.
Renovations are expected to be complete by August 2025. With CPP's involvement, the property’s previously expired affordability status will be extended until 2044 under a renewed Section-8 Housing Assistance Payment (HAP) contract.
Additional partners on the project include the California Tax Credit Allocation Committee (CTCAC) and California Debt Limit Allocation Committee, who issued and allocated 4% LIHTC and Tax-Exempt Bonds, WNC & Associates, and Ready Capital.
CPP (Community Preservation Partners), a mission-driven affordable housing preservation developer, has announced the acquisition and planned renovation of Green Hotel Apartments, an affordable senior (62+) apartment complex in downtown Pasadena, Calif. This is the 15th community in the greater Los Angeles area for CPP and the 41st in the state.
Built in the 1890s, Green Hotel Apartments is listed on the National Register of Historic Places and is a Pasadena Historic Monument. Located at 50 E. Green Street, the 139-unit property is a seven-story mix of studio and one-bedroom units serving seniors earning between 30 and 60 percent of the area median income (AMI). CPP’s total development investment is approximately $100,000,000, which includes the purchase price of $54,000,000 and an estimated per unit renovation cost of $115,000.
“Green Hotel Apartments is a unique opportunity for CPP to renovate a historic property with modern systems while carefully restoring the exterior to its original historic charm and architectural integrity,” said Seth Gellis, President at CPP. “Our experience in historic affordable housing preservation provides us with an asset which we look forward to utilizing on Green Hotel.”
CPP’s renovations will include building envelope restoration, new flooring, countertops, appliances, and lighting, and upgrades to ADA units and ADA paths of travel. Wi-Fi will be installed throughout the units. CPP plans to develop a community space to include a theater, conference rooms, business center, multipurpose room, and library. Windows and air conditioning systems will be replaced in such a way as to look like the original building.
As part of CPP’s community work, Green Hotel Apartments residents will be able to participate in on-site health, education, and employment services through a partnership with Project Access.
The property’s affordability was set to expire in July 2035. Affordability will be deepened and renewed for at least 20 more years under a renewed Section-8 Housing Assistance Payment (HAP) contract and 55 years under the new CA Tax Credit Regulatory Agreement that will be implemented post-renovation.
“Green Hotel Apartments is currently at 100% occupation with a full waitlist, reflecting the high demand for affordable senior housing options in the area,” said Belinda Lee, Director – Development at CPP. “We’re pleased to preserve this historic landmark and provide much-needed housing for the Old Pasadena neighborhood.”
Partners on the project include the California Tax Credit Allocation Committee (CTCAC) and California Debt Limit Allocation Committee, who issued 4% tax credits and bonds, California Municipal Finance Authority, U.S. Department of Housing and Urban Development (HUD), WNC and Associates, Citibank N.A., California Bank and Trust, Belveron, and Goldrich Kest.
Originally published on Forbes Business Councils by Seth Gellis, President of CPP.
With the continued urgent need for more affordable housing across the country, industry experts and academics are looking for solutions, whether they involve preserving existing communities nationwide or creating additional units where they are needed most.
According to a recent study by the National Low Income Housing Coalition, there is a shortage of 7.3 million available affordable rental homes for the lowest-income renters in the U.S. While it’s a complex issue, one overlooked path to financing is the option to increase the use of private activity bonds (PABs), which pair with 4% low-income housing tax credits (LIHTCs).
Volume cap, a “use it or lose it” resource provided by the federal government to the states based on a per capita formula, allows tax-exempt financing to be issued for affordable housing at a lower interest rate. The lower interest rates offset the lower net operating income that debt is sized from as a tool to help keep project sources and uses in balance. This ensures a greater level of capitalization, reducing the need for other sources and increasing the funding available for construction activity.
This important resource is allocated and awarded by state finance agencies, some of which unfortunately do not use all the resources made available to them. This means that if a state agency has unused volume cap and a deal is unable to make it through the funding cycle for that state in a timely manner, the resource and accompanying economic and social benefits are lost for good.
So, what can affordable housing professionals and organizations do to ensure the volume cap does not go to waste or to use it in the most efficient manner possible?
One solution is to work with local bond issuers and agencies that support them.
Local bond issuers play a major role in identifying the projects most impactful for their community and often can reduce the overburdened load that housing agency staff must deal with.
At my company, we find that an average deal may take nine months to close, plus an additional year to complete the development or preservation of the property (with a few more months of time tagged on for an IRS Form 8609 to be issued). We consider that a quick turnaround. But when entities do not use a local issuer for the deal, the acquisition or renovation timeline can extend for an additional one and a half to two years—sometimes making the deal untenable.
Across the U.S., many affordable properties are in immediate need of preservation; and many of these deals use LIHTC as a part of their financing. Completing these deals as quickly as possible is integral to reducing the loss of affordable units and preserving options for communities.
According to a 2024 report from Harvard’s Joint Center for Housing Studies (JCHS), there was a loss of 2.1 million units with rents below the maximum amount affordable for the lowest income group since 2012. While creating new affordable housing units is a part of the solution, new construction alone won't be able to keep up with the need, especially if communities are losing more units than are being created.
I've found that when local leaders, community advocates, developers, lenders and agencies can work together, it creates efficiencies and the strongest outcomes in affordable housing development and preservation. Communities should have a say in their local housing choices. Local leaders and community advocates have the best understanding of residents’ needs and where and how to invest, and good developers will listen.
Working with local issuers increases the ability for local jurisdictions to control the terms and circumstances that preservation or new development must follow in addition to minimum state provided standards. When deals and terms are localized, it creates the largest impact for the community. Specific benefits may include:
• The community is empowered to decide the priorities they wish to address. Developers should foster dialogue with local housing advocates and community leaders to discuss and outline their wish list. Unsurprisingly, the goals are often the same.
• Related improvement projects (e.g., street, sewer, LEED), social service requirements, crime prevention programs, prevailing wage, are benefits that are, by and large, staying within their community (should they choose). This autonomy also relieves pressure on developers by having an equal partner in the myriad decisions.
• Locals control within the development what is done, where it’s done and who does it within the community. For example, they may have checklists or requirements (e.g., Section 3 that requires a local workforce) that directly benefit the local community and economy.
Affordable housing developers looking to finance their deals may have the opportunity to work with a local issuer to get the deal done. I recommend you keep these best practices in mind:
Just like when working with any financial partner, organization is paramount. As a developer, that means having the deal structure solidified, financial documents in place and a single point of contact for the local issuer identified. The more streamlined you can make the process, the better.
Developers likely understand that one of the key benefits of working with a local issuer is the ability to help impact the local community in specific ways. But, for that impact to be felt in the biggest way, developers must take the time to truly understand the local community and its needs.
Developers need to reach out early in the process to understand if the issuer has sufficient volume cap, and what their processes may be. Creating a relationship early makes the processing, organization and understanding of their needs much easier.
Ultimately, the ability to work with local agencies carries many benefits and can make developers and investors nimbler in their work solving the nation’s affordable housing crisis.
CPP, a mission-driven affordable housing preservation developer, has announced the acquisition and planned renovation of Lexington Green Apartments, an affordable housing complex in El Cajon, Calif. CPP partnered with co-developer The Hampstead Companies on the deal. This is the second community in El Cajon for CPP, joining Park Villa Apartments.
Lexington Green Apartments is located in a primarily residential neighborhood two miles east of downtown El Cajon, which sits 17 miles east of downtown San Diego. Originally built in 1970, the property last underwent a tax credit renovation in 2007, which replaced some, but not all, original building systems. The property consists of 144 units, spread across 12 two-story residential buildings. CPP’s total development investment is approximately $80,000,000, which includes the purchase price of $52,880,000 and estimated renovation costs exceeding $80,000 per unit.
“Lexington Green Apartments aligns with one of CPP's core philosophies of strengthening cornerstone communities in the neighborhood while extending the affordability of the community,” said Evan Cramer, Assistant Development Manager at CPP. “We hope to accentuate the feeling of pride that Lexington Green's residents have for their community while providing the physical upgrades necessary to ensure the property remains a prominent piece of the community for many years to come.”
The renovation will exceed the 10% energy savings requirement from the California Tax Credit Allocation Committee (CTCAC) through the replacement of all windows with energy efficient vinyl retrofit windows, water heaters, Energy Star appliances, and energy efficient LED light fixtures.
“At Lexington Green, incorporating green, energy-saving appliances and fixtures allows us to weave sustainability into the residents’ daily lives and helps further our goal to create a more sustainable future,” John Fraser, Vice President CPP – East.
Additional upgrades will include dryrot repairs, flooring replacement, new cabinets and countertops. ADA-complaint upgrades will be made for units and path of travel throughout the property.
CPP and The Hampstead Companies are partnering with LifeSTEPS to provide instructor-led adult educational classes including financial literacy, computer training, resume building, nutrition, exercise, parenting, and more. LifeSTEPS will also provide individualized health and wellness services and programs such as crisis intervention, practical counseling and emotional support, physical and mental health assessments.
Renovations are expected to be complete by August 2025. With CPP's involvement, the property’s previously expired affordability status will be extended until 2044 under a renewed Section-8 Housing Assistance Payment (HAP) contract.
Additional partners on the project include the California Tax Credit Allocation Committee (CTCAC) and California Debt Limit Allocation Committee, who issued and allocated 4% LIHTC and Tax-Exempt Bonds, WNC & Associates, and Ready Capital.