Our portfolio of affordable apartment communities varies in terms of geography, property size, age of construction and resident population served. Our communities range in size from 100 to 300 units and are typically located in established suburban areas of 2nd and 3rd-tier metropolitan markets. Upon acquisition, properties are, in general, over twenty-five years old and in need of comprehensive rehabilitation. We seek to provide quality, affordable housing to a diverse client base, including single individuals, families with children and seniors. The diverse financial structure of each community reflects Atlantic American's broad experience in affordable housing finance and may include Low Income Housing Tax Credits, tax-exempt bonds, HUD loans and subsidies, both project and tenant-based section 8, 236 IRP decouplings, and local and state government loan and grant programs.
Atlantic American acquires and rehabilitates properties for its own portfolio and often times in partnership with not-for-profit organizations. In those projects which we have developed in partnership with not-for-profit organizations, we contribute our transaction, financing and construction/renovation expertise, while the not-for-profit concentrates on its service mission. Dependent on the goals of the not-for-profit and the needs of the project, we either remain a co-general partner for the life of the partnership or provide a “turn-key” service to the not-for-profit and exit the partnership upon the successful rehabilitation and stabilization of the property.
Each potential project undergoes a thorough internal due diligence and underwriting process immediately upon obtaining site control. Based on the results of this process, we proceed rapidly with those projects that offer long-term financial feasibility. In our relationships with the nation’s foremost lenders, investors and underwriters, we leverage our financial strength and track record, to obtain the most advantageous debt and equity structure available. This enables us to pay a very competitive price for each property and to perform an extensive physical renovation of it.
Each of Atlantic American’s affordable apartment communities is financed with proceeds from the syndication of low income housing tax credits and typically with a loan made from the proceeds of the sale of tax-exempt private-activity bonds. Depending on the project and financial market conditions, project bond loan structures have run the spectrum from private bond placements and limited public offerings of nonrated and unenhanced bonds to FHA and FNMA credit enhanced, AAA-rated public offerings. Beyond the basic debt structure, we have the creative ability and appetite to work with or around assumed and/or subordinate loans, ground leases, various deed restrictions and other encumbrances.
Our apartment communities are predominantly located in established suburban neighborhoods of major, metropolitan areas. We also target well-located urban properties. Either urban or suburban, we favor properties located in the lower-cost areas of economically strong regions. Lastly, we seek those properties with good visibility that are within a short distance of schools, parks, shopping and employment centers.
Each property’s rehabilitation scope of work is driven by a comprehensive capital needs assessment, ensuring that all major building systems and components have a remaining useful life of at least fifteen years. We personally, physically inspect an entire property, typically viewing over 95% of a property’s apartments, and verify and supplement our findings with those of 3rd party inspecting engineers. Rehabilitations are performed by Atlantic American’s affiliated general contracting company and have ranged from relatively modest levels of approximately 20% of acquisition cost to “gut level” redevelopments costing in excess of 75% of the acquisition cost.
Guided by Atlantic American’s long-term hold perspective to owning real estate, rehabilitations incorporate quality improvements that meet the following objectives:
We are conscious of the price-sensitivity of our residents and strive to provide only cost-effective aesthetic, convenience and service upgrades offering pronounced benefit. This value approach has resulted in improvements on projects such as:
For each property, Atlantic American contracts with a professional third-party property management firm with a well-established track record of successfully managing properties in the local market. They must also be well-versed in the leasing, reporting and other unique requirements inherent to affordable housing finance programs.
The principals and staff of Atlantic American play a hands-on role in overseeing the management of our properties to ensure resident satisfaction and preservation of the physical asset. Each of our property managers adhere to an operations manual that we developed. Without limiting the managers’ personal style of service, this ensures that Atlantic American’s properties are consistently managed and maintained to our standard of quality.
The quality of on-site management and maintenance staff is critical to the long-term success of the project and we work closely with our management firms to find and retain the best and the brightest individuals for each position.
At Atlantic American, service extends beyond quickly repairing a leaky faucet. We and our management team work with local community service organizations to provide the resources and programs of greatest interest and benefit to our residents. Depending on the specific needs of the resident population, programs may include: