About Asset Management
Enterprise Community Investment, Inc. is a national leader in investment and development services for affordable housing and community revitalization efforts. Founded in 1984 as a socially motivated for-profit corporation, Enterprise’s core business is syndicating tax credit equity investments through the federal Low-Income Housing Tax Credit (LIHTC) program. Enterprise took a lead role in the creation of the LIHTC program, and to date our investments are helping to build affordable homes in 49 states, Puerto Rico and the District of Columbia.
The federal LIHTC program was enacted in 1986 and provides tax incentives to encourage the private investment of capital for the development of decent, affordable rental housing. To receive the benefits of the LIHTC, the program requires owners of qualifying rental housing to maintain compliance with low-income occupancy requirements for a minimum of 15 years. Those projects that received their tax credit allocations after 1989 must continue to meet federal low-income occupancy requirements for an extended period (usually a minimum of 30 years).
Since 1986, Enterprise has used LIHTC to finance affordable apartments and homes. The Enterprise Asset Management team oversees a portfolio of 96,000 homes financed by LIHTC investments – from project construction, lease-up and completion throughout the 15-year LIHTC compliance. Enterprise monitors the projects, focusing on real estate management, tax credit and lender compliance as well as financial and tax review. Enterprise proactively manages the proper allocation of tax losses and credits throughout its investors’ ownership of the project.
Our more than 80 Asset Management professionals provide a range of services that preserve value for investors and quality of life for residents, including:
- Close oversight of construction and lease-up, including review of inspection reports, construction draws and verification of tenant income
- Regular analysis of financial performance and site visits, including inspection of physical condition
- On-going monitoring of operations and project information and timely reporting to investors
- Early recognition of potential problems, active response to address issues and workouts capacity to intervene intensively with more complex or difficult situations
- Work with partners who want to transfer property ownership at the end of the 15-year LIHTC compliance period
Lessons learned through asset management offer experience that can help developers improve the housing they build. On an annual basis, Asset Management issue an analysis of trends in the performance of the portfolio.
Enterprise works with a variety of local, state and federal income-targeted housing finance programs, including: HOME, Federal Home Loan Bank’s Affordable Housing Program, Section 8, McKinney funds, Housing Opportunities for People with AIDS (HOPWA) and various supportive housing programs.
Enterprise’s asset management database tracks project performance, supports underwriters in analyzing potential credit investment, and provides information on equity funds and projects to investors. The Enterprise database is fully integrated among asset management, syndication and investment management, allowing easy access to information.
Consulting
Enterprise provides the same high-quality asset management services on a consulting basis. Please contact us to inquire about how we can assist your organization with its asset management needs.
Portfolio
Portfolio Overview
As of August 2011, Enterprise provided asset management to 1,532 low-income housing tax credit projects in 49 states, Washington, D.C. and Puerto Rico. The portfolio consists of: - 1,450 projects which have reached stabilization
- 82 projects which are in various stages of development and lease-up
- More than 96,000 affordable housing units
- More than $6.2 billion in net equity
Portfolio Characteristics
While affordability is the predominant characteristic of the Enterprise portfolio, there is also a significant concentration in urban areas with nonprofit sponsors. Construction type and age of the project are more evenly dispersed amongst the portfolio.
Project Location
- Of the total 1,532 projects in the LIHTC portfolio, 63% are located in urban areas.
- Of the $6.2 billion net equity invested in projects, 73% is invested in the urban locations.
- Rural projects represent 21% of the portfolio count and 13% of the equity invested.
Project Type
- Currently 100% of the projects in the portfolio are residential properties, 11% of which include commercial space (mixed-use) and 13% of which include market rate residential units (mixed income).
- Projects with exclusively low-income rental units account for 76% of the portfolio, but overall 94% of all units in the portfolio are low income.
- Over 72% of the total net equity invested in the portfolio is with projects that strictly contain low income units; this group has the lowest average net equity at $3.8 million per project.
Project Sponsor Type
- Nonprofit sponsors represent 79% of the portfolio’s sponsors, although by region they represent approximately 83% and 85% of both the Northeast and West region’s sponsors, respectively.
- While projects with for-profit sponsors have a higher net equity per project, they have a lower net equity per unit than projects with non-profit sponsors.
Project Construction Type
- More than half of the 1,532 projects in the portfolio are new construction.
- The next largest group is substantial rehabilitation with 27%.
- On a regional basis there are a higher percentage of substantial rehabs in the Northeast. This is due to the large number of substantial rehab projects generated from New York City’s historical stock of vacant and occupied properties that have been rehabilitated for low income housing.
Environmental Commitment
Through Enterprise Green Communities, Enterprise seeks to fundamentally transform the way we locate, design, build and rehabilitate affordable homes. The Enterprise Green Communities Criteria promote smart growth, public health, energy conservation, operational savings and sustainable building practices in affordable housing design.As part of Enterprise’s green commitment, Asset Management has identified resources to help developers “green” their properties through construction and on-going maintenance. As part of the family of Enterprise Green Communities resources, the following have been developed specifically for Asset Management: