Partnerships & Joint Development Texas Rural Rental Housing Preservation Academy Session #3 April 11, 2018 Start w/ brief overview of Greystone – who we are and what we do. And more importantly, what my team does in ways of preservation of affordable housing in the rural space across the country … Also hope it will put into context a little about us and our mission, our passion. Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Resources for Assistance Packagers Consultants Co-Owners Partners / Development Partners Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnership Defined Merriam Webster: The state of being a partner A legal relationship existing between two or more persons contractually associated as joint principals in a business A relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities A business organization owned by two or more persons who agree to share the profits and losses (Student Dictionary) Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Transaction Roles & Responsibilities 1 Feasibility Analysis Co-Developer Applications Guarantees Construction Management Financial Management Compliance 2 3 4 5 6 Feasibility Analysis Analyze the feasibility of rehabilitation, recapitalization and preservation utilizing various financial tools and structures. Co-Developer Serve as Co-Developer in and coordinate all due diligence, commission and approve all third party reports, arrange for architectural and construction services, and all other developer role requirements for the property. Advance all funds necessary to pay for pre-development / pre-closing transaction costs (repaid at closing). Applications Prepare and submit on behalf of the Ownership all applications as required for redevelopment. Guarantees Provide Construction Completion and Credit Delivery Guarantees (if necessary) as typically required by Lenders, Investors, etc. Construction Management Coordinate and assist with renovation activities, including the construction draw services. Financial Management Coordinate and secure all financing (debt and equity) on behalf of the Ownership. Coordinate and manage all construction draw services; coordinate and manage the cost certification process, and coordinate and assist with obtaining the IRS Tax Credit documents (8609). Compliance Assist with compliance and file reviews of first year tenant files. 7 Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnership Benefits Human Capital Staffing Finance, Construction, Development Financial Capital and Strength Predevelopment Expenses Guarantees Construction Completion, Credit Delivery, Operating Deficit Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnership Benefits Experience, Knowledge, and Expertise HFAs, Lenders, Investors Ability to Execute Expand Capacity without Sacrificing Day-to-Day Operations Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Type of Partners For-Profit Non-Profit Tax-exemptions Set-a-sides Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnership Structures / Arrangements Ownership – Real Estate (Long-term and Short-term) Ownership – Development Entity / Developer of Record Legal Documents Development Agreements Memorandum of Understandings Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnership – Typical Terms Negotiated Roles & Responsibilities Various Stages of the Transaction Ownership Financial Terms Guarantees Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Partnerships – Final Thoughts Consider All Options, Determine Best Fit, and Choose Wisely! Copyright © 2017 Greystone & Co., Inc. All rights reserved.

Thank you Will Eckstein Senior Vice President Greystone Affordable Development 4025 Lake Boone Trail, Suite 209 Raleigh, NC 27607-2986 (919) 573.7516 Will.Eckstein@greyco.com Copyright © 2017 Greystone & Co., Inc. All rights reserved.