CDT Sees Record Capital Deployment, Dividends in 2015

John Divers, COO and CFO at Community Development Trust (CDT), joined REIT.com for a video interview at REITWise 2016: NAREIT’s Law, Accounting and Finance Conference at the Marriott Marquis in Washington, D.C.

New York City-based CDT is a private, hybrid REIT that is active on the debt and equity sides of affordable housing projects.

Divers described 2015 as “another strong year for CDT,” which saw record capital deployment, record dividend levels and the largest equity investment in the company’s history. All of these factors enabled CDT to have a positive impact on the lives of more than 3,800 low- and moderate-income families and the elderly, Divers stressed.

During 2015, CDT invested more than $36 million in its debt and equity portfolios, providing financing for close to $200 million in asset acquisitions, Divers said.

CDT’s near-record funds from operations (FFO) resulted in a dividend of $1.14 per share, including a 30 cent year-end special dividend, Divers added.

Based on the strong dividend performance, CDT encouraged a number of its institutional investors to convert more than $31 million of preferred shares into common shares, Divers noted. This had a significant impact on the company’s capital structure, increasing common stock outstanding by more than 40 percent.

Looking more broadly, Divers observed that the need for affordable housing continues to grow across the country and in all markets. To help address that demand, Congress recently passed an increase in Section 8 funding for low-income households and an increase in funds for the affordable housing industry, Divers pointed out.

Meanwhile, Divers commented on CDT’s recent expansion into the charter school segment.

“There’s more to a community than affordable housing, and we saw a need in the area of charter schools,” he said.

Divers explained that many of the loans that were mainly used to finance charter school projects are now coming due for renewal and are in need of long-term financing.