On the heels of one of its most active years for acquisitions and financing, Community Development Trust (CDT) plans to further expand its efforts to provide affordable housing across the country.
“We believe that our work throughout the past year demonstrates our strength and versatility as an organization, and we look forward to further our impact within the community development industry for years to come,” said Joe Reilly, president and CEO of CDT.
The 15-year old private REIT, which is headquartered in New York, focuses on providing capital to create and sustain affordable housing units in low-income neighborhoods. By investing in those properties, especially those in which the existing owners are looking to exit, CFO John Divers said CDT helps stabilize and improve the physical infrastructure of surrounding communities. In 2012, CDT acquired or committed to finance more than 1,000 units of affordable housing, boosting its total housing stock to 5,000 units.
“The properties we have financed have created significant benefits for both their residents and the communities surrounding the properties,” said John Divers, CDT’s chief financial officer. “In most cases, these communities are economically distressed and in need of stabilization and revitalization.”
Divers said research has shown that maintaining, upgrading and rehabilitating an aging or deteriorating property has positive economic spillover effects. They include raising surrounding property values and decreasing violent crime.
CDT reported record operating funds from operations (FFO) for the year. As a hybrid REIT, Divers attributed CDT’s success in 2012 to improved performance in both its equity and debt portfolios. In addition to adding four new properties to its equity portfolio, CDT also syndicated “a large portion of the portfolios” purchased by CDT in 2011, according to Divers.
CDT also made its first acquisition with a nonprofit organization when it partnered with LINC Housing Corp. to acquire a 60-unit property serving both seniors and low-income families in Fresno, Calif. Divers said the company hopes to expand its partnerships with nonprofit owners and developers in the affordable housing arena.
“Nonprofits are very active in moderate- and low-income communities across the country, and due to their status are able to bring additional subsidies and services to the properties,” he said. “Coupled with CDT’s capital, this should allow for the right mix of subsidized and market rate capital to preserve and improve existing affordable housing stock.”