John Divers, COO and CFO of the Community Development Trust (CDT), joined REIT.com for a video interview during REITWise 2014: NAREIT’s Law, Accounting and Finance Conference held in Boca Raton, Fla.
Founded in 1998, New York City-based CDT is a private, hybrid REIT that is active on the debt and equity side of affordable housing projects.
Divers was asked about CDT’s capital-raising activities, which were particularly strong last year, and the outlook for future transactions.
Divers noted that as a private REIT, capital raising has been important to CDT since its inception. CDT has carried out a variety of capital raises in the $40 to $50 million range. It has held multiple common stock raises and also a convertible preferred stock raise, he said. At present, CDT is in the middle of a rate preferred stock raise, Divers added.
Recently CDT received a $125 million bond guarantee award under an inaugural program from the Treasury Department. CDT received the largest portion of the Community Development Financial Institutions (CDFI) Bond Guarantee Program’s total allocation of $325 million. Divers noted that the award will provide long-term financing at attractive rates.
Divers was asked his thoughts on how CDT was able to secure the largest portion of the allocation relative to other recipients.
“We’d like to think it was based on our financial strength. CDT is probably one of the best-capitalized CDFIs in the country,” he said.
In other capital-raising developments, CDT has also signed a participation agreement with a major insurance company, Divers added.
Divers also discussed a recent $52 million deal to purchase and rehabilitate a 360-unit property in New York’s Coney Island area. CDT’s equity investment for the purchase and rehabilitation is expected to help preserve affordable housing in the area, which was hit hard by Hurricane Sandy.
Divers explained that the $12 million rehabilitation budget will make the property more energy efficient and resilient to future storms. He also noted that the project brought together many of the major community investment organizations in New York State and New York City.