PRESERVATION CASE STUDY Marketing/transformationRelocation Credit Delivery Investor issues

Union Square Apartments Windsor

MARKETING/TRANSFORMATION Armory Square to Union Square, Windsor Year rehabbed: 2009 Creek View Housing, Vergennes Year rehabbed: 2004

ARMORY SQUARE APARTMENTS PROFILE AT TIME OF PURCHASE Downtown historic building in poor condition 74 Units Mod Rehab Section 8 with expired Tax Credits (2004) 50 of the 74 units occupied Local reputation as housing of last resort

UNION SQUARE - TRANSFORMATION Reduce number of units from 74 to 58 Reducing PB section from 74 to 25 Change unit mix Three bedroom units size increased Two bedroom units size increased One bedrooms werent available New Tenant Amenities: community room, on-site management, laundry room, and elevator

UNION SQUARE - TRANSFORMATION Management and marketing to re-brand the building New name New tenant profile – part of marketing

CREEKVIEW AT TIME OF PURCHASE Rural Development subsidy for 20 of 36 units Management not local and didnt have a big presence Risk of Conversion to Market Rate Housing

CREEK VIEW TRANSFORMATION Preserved affordability Local management and ownership Tenant amenities: laundry, porches, storage, accessibility

Creekview Apartments – Vergennes

EXISTING TENANT PROFILE Critical to know existing tenant incomes Income mix informs financing options Cost of permanent relocation can be high

RELOCATION Occupied rehab Contractor selection is key Temporary moves require a lot of owner coordination Involvement of management is critical Benefit of occupied rehab is quicker credit delivery

CREDIT DELIVERY Claim the credit back to January 1 st or acquisition date Construction completed before end of year Improves return – investor must be admitted to partnership

RETURN CALCULATION IRRAnnualIRRAnnual Year Quarter PaymentsCreditsLosses35%SavingsYear Quarter PaymentsCreditsLosses35%Savings /31/ /31/ /30/ /30/ /30/2009 Start Construction 12/31/ /31/ ,511 (7,446) 2,606 13, /31/2010 6/30/ ,511 (7,446) 2,606 13,1176/30/ /30/ ,511 (7,446) 2,606 18,5319/30/ Complete Construction 12/31/ ,776 15,925 (7,446) 2,606 18,531 12/31/ , /31/ ,194 15,925 (7,417) 2,596 18, /31/ ,19415,925(7,417)2,59618,521 6/30/ ,925 (7,417) 2,596 18,5216/30/ ,925(7,417)2,59618,521 9/30/ ,925 (7,417) 2,596 18,5219/30/ ,925(7,417)2,59618, /31/ ,925 (7,417) 2,596 18,521 12/31/ ,925(7,397)2,58918, /31/ ,925 (7,397) 2,589 18, /31/ ,925(7,397)2,58918,514 6/30/ ,925 (7,397) 2,589 18,5146/30/ ,925(7,397)2,58918,514 9/30/ ,925 (7,397) 2,589 18,5149/30/ ,925(7,397)2,58918,514 12/31/ ,925 (7,397) 2,589 18,51412/31/ ,925(7,397)2,58918,514

RELOCATION Vacate building and substantial rehab: Critical to have a plan and a budget Decision about when to begin leaving vacancies unfilled Who will be returning?

INVESTOR ISSUES Timing of admission – take care to deliver the best return Bank financial participation is limited if its a bond deal – no construction loan Good historical data with regard to market, income and expenses