1 00:00:00,000 --> 00:00:06,320 This is the real estate shop where each episode will bring you a top industry expert to share their current programs or projects 2 00:00:06,640 --> 00:00:08,880 That are making an impact in our communities today 3 00:00:09,680 --> 00:00:14,960 Be sure to check us out on spotify and apple podcasts. Hi. Good morning. How you doing? 4 00:00:15,280 --> 00:00:17,280 Good good 5 00:00:18,320 --> 00:00:20,260 Morning carbon good morning 6 00:00:22,000 --> 00:00:27,920 You uh, do you know curvin? Uh, no, I have never had the pleasure. I think she knows my wife better 7 00:00:27,920 --> 00:00:29,920 She's looking for smargo 8 00:00:30,560 --> 00:00:32,560 Oh my goodness. Okay 9 00:00:33,040 --> 00:00:35,040 Well, that changes everything 10 00:00:37,760 --> 00:00:41,680 It's always six degrees of separation I'll tell you that wow wow 11 00:00:42,400 --> 00:00:44,400 That's amazing. Okay. Yeah 12 00:00:44,880 --> 00:00:49,680 Everybody knows your wife. I come like prior to you curvin. I don't I mean I didn't know your wife 13 00:00:49,680 --> 00:00:53,280 But apparently she's pretty uh, well known. Yeah, she's a busy bee 14 00:00:53,840 --> 00:00:55,840 so 15 00:00:55,840 --> 00:00:58,000 I mean we love her she um 16 00:00:59,440 --> 00:01:05,040 You know her her work with us on those are kind of our start was with boa in the multi-family 17 00:01:05,600 --> 00:01:11,600 New construction world so we go way back. So she told me to tell you hello carmen. Oh, thank you 18 00:01:13,360 --> 00:01:15,600 Good morning. Good morning and welcome to the real estate shop 19 00:01:16,160 --> 00:01:20,320 Today we had a pleasure of having carmen romero ceo and president of 20 00:01:20,320 --> 00:01:25,440 The affordable partnership for affordable housing arlington arlington partnership for affordable housing 21 00:01:26,480 --> 00:01:28,480 Uh carmen, thanks for joining us 22 00:01:29,040 --> 00:01:34,080 Just to get started. What is your background and how did you get started in your current position? 23 00:01:35,360 --> 00:01:41,280 Well, first and foremost, thank you for inviting me. I'm thrilled to be here and to answer your question. I'll jump right in 24 00:01:42,000 --> 00:01:44,480 My background is in finance. I 25 00:01:45,280 --> 00:01:48,000 Went to undergrad at georgetown worked for a few years 26 00:01:48,000 --> 00:01:50,000 in a 27 00:01:50,000 --> 00:01:56,560 Banking program that was um, predecessor to bank of america called nations bank and after a few years went back and got my 28 00:01:57,120 --> 00:01:59,120 MBA in finance 29 00:01:59,120 --> 00:02:02,000 Um up in your neck of the woods steven of philadelphia 30 00:02:02,720 --> 00:02:09,760 And coming out of there. I decided I really wanted to be in the d.c area where um, I had fallen in love with the region bought georgetown 31 00:02:10,400 --> 00:02:14,240 And went to work at marriott international in the finance 32 00:02:14,240 --> 00:02:18,560 And now this group that supported the cfo in five-year 33 00:02:19,440 --> 00:02:24,640 Forecasting for the marriott conglomerate. So it was a boutique group a nine-person 34 00:02:25,280 --> 00:02:28,720 Group that would work with with him and his office 35 00:02:29,440 --> 00:02:32,400 And i've really from there met a woman 36 00:02:33,040 --> 00:02:39,040 Who later hired me to go with her to a division of car construction that was starting up a real estate development group 37 00:02:39,520 --> 00:02:42,000 So that in addition to construction they could do rezoning 38 00:02:42,000 --> 00:02:48,400 And public private partnerships and and structure deals and you know take the land down and the rest 39 00:02:48,960 --> 00:02:53,600 And it was while I was at clark. I went to a uli panel 40 00:02:54,160 --> 00:02:59,840 The state of dc real estate and I saw nina janipal the former ceo of apah on stage 41 00:03:00,320 --> 00:03:02,000 Talking about this 42 00:03:02,000 --> 00:03:08,240 Nonprofit that was doing affordable housing work and I have to say I sat with that for three years 43 00:03:08,240 --> 00:03:14,640 And three and I just kept thinking about wow. I think I would really enjoy that and three years later. I took her out to uh 44 00:03:15,440 --> 00:03:19,440 To uh coffee to pick her brain and and that changed my life. I've been here 45 00:03:20,560 --> 00:03:22,560 Uh over 12 years ever since 46 00:03:23,520 --> 00:03:26,720 Wow, that's amazing. And what's the mission of the organization? 47 00:03:28,080 --> 00:03:32,160 Uh, it's it's good that you should ask because my board just adopted a new 48 00:03:32,160 --> 00:03:38,080 Mission statement as well as our first ever vision statement as part of our strategic plan last month. So 49 00:03:38,800 --> 00:03:43,600 Our our mission is we exist to provide quality affordable housing 50 00:03:44,160 --> 00:03:48,160 And residence center programming to help our residents make the most of their home 51 00:03:48,960 --> 00:03:54,160 And and the vision that is coupled with that that we're really excited about is 52 00:03:54,720 --> 00:03:56,720 Everyone deserves a place to call home 53 00:03:57,120 --> 00:04:00,960 A foundation that is a foundation for the people of our community 54 00:04:00,960 --> 00:04:02,960 A foundation to live their dreams 55 00:04:03,840 --> 00:04:09,440 And why that's so important is everyone deserves a place to call home. We believe housing is a human right? 56 00:04:10,400 --> 00:04:13,920 and as part of our mission that the key piece there is 57 00:04:14,640 --> 00:04:22,320 We provide quality affordable housing. So we are developers we build the housing but we couple that with residence centered programming 58 00:04:22,320 --> 00:04:24,320 IE residence services 59 00:04:24,320 --> 00:04:30,320 So we have a lot of people that are in that 60 00:04:31,200 --> 00:04:37,120 Residence centered programming to make sure that people have opportunities from cradle to career 61 00:04:37,760 --> 00:04:40,160 To have for housing stability and for health and wellness 62 00:04:41,920 --> 00:04:46,560 Excellent so how many units does opa have and what's in the pipeline? 63 00:04:46,560 --> 00:04:53,600 We have 2300 homes today that has over 4000 people 4800 people 500 units under construction 64 00:04:53,600 --> 00:04:59,920 We have four projects under construction as we speak and we have another 1500 apartment homes approaching closing 65 00:05:00,160 --> 00:05:03,440 We have a closing our first in dc next month and 66 00:05:04,240 --> 00:05:06,000 We have some 67 00:05:06,000 --> 00:05:11,920 Another closing this summer in arlington and then a very very large closing if there are facts at the end of the year 68 00:05:11,920 --> 00:05:16,240 How did you guys decide on the fairfax in dc expansion? 69 00:05:17,200 --> 00:05:20,640 Um, it was really a function of realizing 70 00:05:21,280 --> 00:05:25,680 Arlington's a 26 square mile jurisdiction. It's the smallest county in the united states 71 00:05:26,400 --> 00:05:28,400 And we have built such capacity in 72 00:05:29,680 --> 00:05:36,240 At apa and we realized that there's such regional need for affordable housing that that the boundaries of arlington 73 00:05:36,240 --> 00:05:41,360 Weren't really enough to fulfill our our mission and so in 74 00:05:41,680 --> 00:05:44,480 I mentioned this last strategic plan that was passed last month 75 00:05:44,800 --> 00:05:48,160 Well, the prior strategic plan which we adopted in 2017 76 00:05:48,720 --> 00:05:53,120 We said to our board we even though we're there arlington partnership for affordable housing. We want to 77 00:05:53,680 --> 00:06:00,800 Look into and talk to and and commit to at least trying to go regional and seeing if if people are receptive 78 00:06:00,800 --> 00:06:11,120 to wanting our help other municipalities and it's really been a wonderful experience to to grow outside and and become more and become a regional 79 00:06:11,840 --> 00:06:19,120 Nonprofit we've learned a lot and like I said, I think we now have two projects under construction of fairfax today 80 00:06:19,440 --> 00:06:25,280 We acquired a building in montgomery county and we're closing on our first round-up deal in dc next month 81 00:06:25,280 --> 00:06:30,240 Terrific. Um, you know a lot of developers have the aspirations to grow beyond 82 00:06:30,560 --> 00:06:34,160 Being a local development developer. How was apa? 83 00:06:34,800 --> 00:06:40,080 Done it to scale your organization. Is it through jb partnerships or one deal at a time or through rfp's? 84 00:06:42,240 --> 00:06:47,280 We in montgomery county was an acquisition so we were able to 85 00:06:48,160 --> 00:06:50,160 Preserve our local development 86 00:06:50,160 --> 00:06:54,800 In montgomery county was an acquisition. So we um were able to 87 00:06:55,200 --> 00:06:58,320 preserve and extend the affordability in a hundred percent 88 00:06:59,040 --> 00:07:00,240 uh 89 00:07:00,240 --> 00:07:07,360 Housing choice voucher property that was mostly so we got lucky there. I'm going to be honest that was our kind of non virginia deal 90 00:07:08,000 --> 00:07:10,000 and then the other 91 00:07:10,060 --> 00:07:17,280 Developments in dc was in uh, we are in a jb with eya who put out an lp. We responded they selected us 92 00:07:17,280 --> 00:07:20,800 They were doing a town hall project and they had an affordable housing 93 00:07:21,440 --> 00:07:28,020 A component of the development so we are partnering with them there same thing in montgomery county. We partnered up with emerson gallagher 94 00:07:28,560 --> 00:07:31,920 Where they had the project but they hadn't done a lot of 95 00:07:32,480 --> 00:07:37,520 Tied light tech work in virginia. So they brought us in because of our expertise in understanding the virginia program 96 00:07:37,920 --> 00:07:43,520 And then all of our future deals since then are been solo deals. So we got kind of our toad wet 97 00:07:43,920 --> 00:07:44,880 with 98 00:07:44,880 --> 00:07:46,320 some partnerships 99 00:07:46,320 --> 00:07:52,080 and then we were able to you know, get a little bit of a lay of the land and then 100 00:07:52,880 --> 00:07:58,320 Our you know, our sweet spot has been new construction. So we've we've purchased um 101 00:07:58,880 --> 00:08:02,720 Land recently in laden county to do a two-phase project at the end of last year 102 00:08:04,000 --> 00:08:10,800 And we you know, uh, and then fairfax we have done some public part partnerships where we competed for public land 103 00:08:10,800 --> 00:08:16,640 Which is also I think with with being a non-profit. I think we align pretty well with the jurisdiction 104 00:08:17,120 --> 00:08:19,120 Who's interested in long-term affordability? 105 00:08:19,680 --> 00:08:25,520 Low remi's permanent supportive housing elements and that that really has 106 00:08:26,400 --> 00:08:31,840 You know, I think served us well as we try to introduce ourselves to the jurisdictions 107 00:08:34,480 --> 00:08:37,280 Got it for the benefit of the folks out there 108 00:08:37,280 --> 00:08:42,240 The folks out there. Um, I mean arlington is pretty affluent the area itself 109 00:08:43,840 --> 00:08:45,360 Rents are high 110 00:08:45,360 --> 00:08:52,660 Uh, how are how's opa been so successful? I guess over over the years in prioritizing affordability 111 00:08:52,880 --> 00:08:54,880 And I guess does that speak to? 112 00:08:55,120 --> 00:08:56,160 um 113 00:08:56,160 --> 00:09:00,320 the you know powers would be at the political level that prioritized it or 114 00:09:01,040 --> 00:09:05,680 Were you able to just kind of carve that niche out in a very, you know affluent area? 115 00:09:05,680 --> 00:09:10,080 We do have a really strong advocacy community in arlington 116 00:09:10,640 --> 00:09:12,640 Um where there are you know? 117 00:09:12,960 --> 00:09:15,680 And there's also political will I have to say that 118 00:09:16,240 --> 00:09:17,040 the 119 00:09:17,040 --> 00:09:20,720 The leadership in arlington both the staff leadership 120 00:09:21,200 --> 00:09:23,200 As well as the elected leadership 121 00:09:23,440 --> 00:09:26,480 believe strongly that you know arlington is 122 00:09:28,240 --> 00:09:33,360 You know the victim of its own success, I guess you can say right people are getting priced out 123 00:09:33,360 --> 00:09:38,240 A lot of our affordable natural affordable housing as a result of that 124 00:09:39,040 --> 00:09:41,280 uh housing prices, I think the 125 00:09:41,680 --> 00:09:48,160 The average assessment for a single-family home detached is over 1.1 million in 2022 126 00:09:49,200 --> 00:09:50,720 But there's also 127 00:09:50,720 --> 00:09:54,800 What is I think saved us or what's made all of this possible is at the same time? 128 00:09:55,600 --> 00:10:01,680 We have embraced as a community smart growth and so 72 percent of the arlington population lives in multi-family 129 00:10:01,680 --> 00:10:04,000 and so along the roslyn 130 00:10:04,720 --> 00:10:05,760 boston 131 00:10:05,760 --> 00:10:11,840 Metro corridor so long columbia pike and the the county has been very aggressive 132 00:10:12,400 --> 00:10:14,400 around planning for that growth 133 00:10:14,960 --> 00:10:20,560 And affordable housing being a big part of that so they they give you both the planning tools the density tools 134 00:10:20,720 --> 00:10:23,120 But then they also invest through 135 00:10:23,840 --> 00:10:25,360 a very robust 136 00:10:25,360 --> 00:10:28,400 Housing investment fund that they lend money out of 137 00:10:28,400 --> 00:10:31,440 that they you know are able to 138 00:10:32,080 --> 00:10:33,280 take 139 00:10:33,280 --> 00:10:37,200 Contributions that the developers that are building the office buildings and the 140 00:10:37,760 --> 00:10:44,400 Luxury market rate, you know deposit into and then they aggregate it. They lend it to us and we leverage it and build units. So 141 00:10:44,880 --> 00:10:51,120 I think that has been how we've had it done the combination of political will advocacy with the tools because you can't do it 142 00:10:51,680 --> 00:10:55,680 All the ft in the world isn't going to work if you don't have zoning to build the unit 143 00:10:55,680 --> 00:10:58,960 For money to fill the gap. It has to all work together 144 00:10:59,680 --> 00:11:07,280 Yeah, for sure. And as far as that, uh, I guess subsidy money that they do have is there a maximum dollar amount per deal that they 145 00:11:07,840 --> 00:11:09,840 Stole out or make available 146 00:11:10,400 --> 00:11:17,200 Not per deal. I think it's per unit. I think it scales up and down depending on how many units are brought into bear 147 00:11:17,600 --> 00:11:19,040 back and 148 00:11:19,040 --> 00:11:21,040 you know kind of pre 149 00:11:21,280 --> 00:11:23,280 You know pre-rock and roll 150 00:11:23,280 --> 00:11:28,400 Kind of pre you know pre rising cost days. Maybe that would have been in the mid 70s 151 00:11:28,400 --> 00:11:34,000 But now it's probably more in the hundred thousand dollar per unit range right as cdc is a continuing 152 00:11:35,840 --> 00:11:37,520 Excellent 153 00:11:37,520 --> 00:11:39,520 Yeah, and you know arlington is a 154 00:11:39,520 --> 00:11:45,440 Fairly desirable place to to live because you're so close to dc the schools of public school systems 155 00:11:46,320 --> 00:11:48,320 Nine out of ten ten out of ten 156 00:11:48,640 --> 00:11:50,640 in most cases 157 00:11:50,640 --> 00:11:58,160 Um, i'm just thinking about the resident base there. What kind of supportive services are you guys providing as well? We went from 158 00:11:59,360 --> 00:12:03,760 Having a four-person resident services staff at the beginning of pandemic and we're now up to 18 159 00:12:05,040 --> 00:12:07,040 a lot of 160 00:12:07,280 --> 00:12:10,480 What the services were during the pandemic were around 161 00:12:11,760 --> 00:12:17,920 Basic human needs. How do we keep people house? Right? How do we get the rent release that was coming through? 162 00:12:18,800 --> 00:12:20,560 the 163 00:12:20,560 --> 00:12:23,040 Kind of all the covet funding that came to the federal government 164 00:12:23,680 --> 00:12:26,160 in the hands of our residents and we 165 00:12:27,040 --> 00:12:30,960 You know had extended the moratoriums to allow us to work with individuals 166 00:12:31,600 --> 00:12:36,160 So it was housing stability eviction prevention. That's always the first and foremost the second 167 00:12:36,720 --> 00:12:41,540 Um is around food insecurity and so we we do food distributions 168 00:12:42,480 --> 00:12:49,680 um, and we are going to be launching a pilot and creating an off-site food pantry and appas because 169 00:12:49,680 --> 00:12:56,560 Food is even becoming more and more expensive. We we can't the food distributions are not people are hungry and it's only getting worse 170 00:12:56,560 --> 00:12:58,560 So that's where we're going next 171 00:12:58,780 --> 00:13:04,400 Education we do. Yeah, I mentioned we have 4800 residents half of them are in the age of 25 172 00:13:04,960 --> 00:13:10,080 So that means you had a lot of learning loss during covid you have a lot of out of school time 173 00:13:10,400 --> 00:13:13,200 And so we did everything from launching summer camps 174 00:13:14,640 --> 00:13:16,640 To having after school 175 00:13:16,640 --> 00:13:20,560 Uh tutoring help so we can help get people back on track 176 00:13:21,120 --> 00:13:25,920 We launched as part of one of our racial equity diversity inclusion initiatives 177 00:13:26,560 --> 00:13:27,520 a 178 00:13:27,520 --> 00:13:29,680 latinx college 179 00:13:29,680 --> 00:13:31,280 access club 180 00:13:31,280 --> 00:13:36,800 So that we could help parents who had language barriers or maybe had documentation issues access to tools 181 00:13:37,040 --> 00:13:39,200 They needed to help their child go to college 182 00:13:40,080 --> 00:13:40,960 um 183 00:13:40,960 --> 00:13:44,560 Daycare subsidies. I mean you name it as it relates kids 184 00:13:44,560 --> 00:13:46,560 You know reading clubs 185 00:13:47,040 --> 00:13:49,040 And then for seniors 186 00:13:49,120 --> 00:13:56,720 We had you have probably 250 seniors here in in arlington, but a lot of our pipeline is now senior housing. So the first 187 00:13:57,840 --> 00:14:02,400 First two projects allowed in our senior housing our first project in dc is senior housing 188 00:14:02,960 --> 00:14:09,440 Um, and the two projects we're delivering today. It's fair that are under construction today. Fairfax our senior housing. So 189 00:14:09,440 --> 00:14:15,200 So those also require a whole different host of programs for the seniors 190 00:14:17,120 --> 00:14:20,560 And they're 62 plus I imagine yes, okay 191 00:14:22,800 --> 00:14:24,800 Excellent one of the things I tell 192 00:14:25,520 --> 00:14:31,840 A lot of the younger folks that I talked to with distinguishes market rate deals from these tax credit deals with just the amount of 193 00:14:32,400 --> 00:14:36,560 Sources it takes in a tax credit deal to fill a capital stack and make it work 194 00:14:36,560 --> 00:14:42,320 Uh, can you speak a little bit about some of the sources? Um, you all use for your um 195 00:14:42,960 --> 00:14:45,840 projects and you know, just being a non-profit 196 00:14:46,380 --> 00:14:49,040 mission-oriented developer does that avail you to some of the 197 00:14:49,760 --> 00:14:54,980 Um foundation money that might be out there that's not available to a for-profit developer 198 00:14:56,320 --> 00:15:00,000 We do I mean typically our typical stack is you know, the hard debt 199 00:15:00,880 --> 00:15:03,760 The tax credit equity and then the match that that we get from the county 200 00:15:03,760 --> 00:15:09,980 And so probably that was it. Okay, All right. Thank you. So we've done a lot. Uh one woman 201 00:15:10,640 --> 00:15:15,120 Whose shadow or threat changes folder didn't cover any of the programs that her community had. But her 202 00:15:16,880 --> 00:15:23,040 Cold Earth and Rainie's 203 00:15:23,040 --> 00:15:25,040 and it was a first in Virginia. 204 00:15:25,040 --> 00:15:27,220 So we were able to complete that. 205 00:15:27,220 --> 00:15:29,660 We had Ron Twilliger, 206 00:15:29,660 --> 00:15:32,660 who was one of the founders of TravelCo residential, 207 00:15:34,300 --> 00:15:37,860 made a $1.5 million gift for that. 208 00:15:37,860 --> 00:15:39,980 Amazon is a half a million as well 209 00:15:39,980 --> 00:15:41,240 to the capital stack there. 210 00:15:41,240 --> 00:15:44,660 And we used that to create some 30% AMI units 211 00:15:44,660 --> 00:15:46,860 and the rest were foundations 212 00:15:46,860 --> 00:15:50,420 and major donor individuals. 213 00:15:50,420 --> 00:15:52,980 That was the first time we did a philanthropic campaign 214 00:15:52,980 --> 00:15:54,740 in the capital stack. 215 00:15:54,740 --> 00:15:57,200 Then I would say, 216 00:15:59,140 --> 00:16:04,140 beyond that, typically we have not relied on philanthropy, 217 00:16:05,380 --> 00:16:10,380 but as we want to be able to move a project forward, 218 00:16:11,180 --> 00:16:16,180 so we realize relying on a big capital campaign 219 00:16:17,340 --> 00:16:19,460 or we're not sure if the money is gonna come in 220 00:16:19,460 --> 00:16:21,700 extends the time it gets. 221 00:16:21,700 --> 00:16:23,060 So typically our philanthropy, 222 00:16:23,060 --> 00:16:26,020 we target more towards can we reduce rents? 223 00:16:26,020 --> 00:16:29,800 So maybe we underwrote initially as more 60s and 50s, 224 00:16:29,800 --> 00:16:31,620 but if we can do a philanthropic campaign 225 00:16:31,620 --> 00:16:33,500 after we got the capital stacks set, 226 00:16:33,500 --> 00:16:36,100 we can maybe reduce the first mortgage and lower rents 227 00:16:36,100 --> 00:16:39,540 before we get to closing in that, 228 00:16:39,540 --> 00:16:43,020 one and a half period before we place the service. 229 00:16:43,020 --> 00:16:44,580 That's a good strategy. 230 00:16:44,580 --> 00:16:46,060 I know you mentioned Amazon 231 00:16:46,060 --> 00:16:47,340 and I'm sure some of our listeners 232 00:16:47,340 --> 00:16:49,480 that probably perked their ears. 233 00:16:49,480 --> 00:16:52,140 Certainly, Kerbin and I are aware of the role Amazon 234 00:16:52,140 --> 00:16:53,980 has been playing in that area. 235 00:16:53,980 --> 00:16:56,140 Can you just briefly speak to, 236 00:16:56,140 --> 00:16:58,420 I guess, why Amazon is out there? 237 00:16:58,420 --> 00:17:02,260 And I know there are players in funding affordable housing, 238 00:17:02,260 --> 00:17:05,300 but I don't think many of our listeners are aware of that. 239 00:17:06,400 --> 00:17:09,580 Sure, no, I think Amazon has been a game changer 240 00:17:09,580 --> 00:17:14,060 for this region and as well as Seattle and Nashville, 241 00:17:14,060 --> 00:17:15,620 I think for their other target markets. 242 00:17:15,620 --> 00:17:20,180 They launched a $2 billion housing equity fund 243 00:17:20,180 --> 00:17:24,680 that Catharine Hugal and Senthil Sankran, 244 00:17:25,660 --> 00:17:30,400 she recently stepped down Senthil is taking over 245 00:17:30,400 --> 00:17:34,700 and they are investing in affordable housing 246 00:17:34,700 --> 00:17:38,860 in both acquisition as well as new construction commitments 247 00:17:38,860 --> 00:17:43,860 to create, I believe 10,000 units over their markets. 248 00:17:43,860 --> 00:17:48,860 And they have deployed the lion's share of that already. 249 00:17:49,340 --> 00:17:54,180 And we are working with them towards, 250 00:17:54,180 --> 00:17:57,740 they have committed 55 million to add, 251 00:17:57,740 --> 00:18:00,940 but a close off 500 units of new construction 252 00:18:00,940 --> 00:18:05,700 in the Heisen's quarter that we will be breaking ground on 253 00:18:05,700 --> 00:18:07,660 at the end of this year, it's a goal. 254 00:18:09,140 --> 00:18:13,720 And that is truly what I would say is an accelerant. 255 00:18:13,720 --> 00:18:18,380 Every, as I said, our capital stack relies on gap funding 256 00:18:18,380 --> 00:18:20,540 and the counties are tapped out. 257 00:18:20,540 --> 00:18:25,540 So with Amazon's funding, we were able to accelerate 258 00:18:25,900 --> 00:18:27,660 what would have been a two phase project 259 00:18:27,660 --> 00:18:32,460 into one very large impactful 500 unit deal in Tysons. 260 00:18:32,460 --> 00:18:35,420 Tysons has 100,000 workers in Tysons 261 00:18:35,420 --> 00:18:38,160 and zero affordable housing effectively. 262 00:18:38,160 --> 00:18:43,160 So, it's projects and it's funding like Amazon 263 00:18:43,160 --> 00:18:47,920 that can really hopefully inspire other big employers 264 00:18:47,920 --> 00:18:49,480 to do the same. 265 00:18:49,480 --> 00:18:51,880 Yeah, if you look at Tysons now, it's like Disney World. 266 00:18:51,880 --> 00:18:54,560 There's a bunch of new office buildings, 267 00:18:54,560 --> 00:18:58,220 luxury apartments, hotels, it's really different. 268 00:18:59,280 --> 00:19:01,000 That's pretty cool that you guys are bringing 269 00:19:01,000 --> 00:19:03,160 affordable housing to that community. 270 00:19:03,160 --> 00:19:05,120 There's a lot of moving pieces right now in the economy 271 00:19:05,120 --> 00:19:08,840 with interest rates and we've got a sort of third, 272 00:19:08,840 --> 00:19:12,020 a third bank just went under, 273 00:19:12,020 --> 00:19:14,720 which is First Republic out of San Francisco. 274 00:19:14,720 --> 00:19:17,680 They had large presence in New York as well. 275 00:19:17,680 --> 00:19:22,120 Given the moving parts, how is APPA looking at partners 276 00:19:22,120 --> 00:19:23,960 from like a dead side? 277 00:19:23,960 --> 00:19:25,880 Like how are you guys evaluating that 278 00:19:25,880 --> 00:19:27,400 and making changes internally? 279 00:19:27,400 --> 00:19:28,240 Well, you know- 280 00:19:28,240 --> 00:19:29,800 If any changes, right? 281 00:19:29,800 --> 00:19:33,160 If any changes, I'd say we've always been conservative 282 00:19:33,160 --> 00:19:36,680 and we have a very robust, in addition to, you know, 283 00:19:36,680 --> 00:19:40,640 the staff, we have 26 person board of directors 284 00:19:40,640 --> 00:19:44,560 and a finance and ops committee that includes, you know, 285 00:19:44,560 --> 00:19:46,400 my board chair is the chief investment officer 286 00:19:46,400 --> 00:19:47,600 of a publicly traded company. 287 00:19:47,600 --> 00:19:50,480 We've got bad presidents since it are. 288 00:19:50,480 --> 00:19:55,480 So we have an executive committee that stands by my side 289 00:19:56,280 --> 00:20:01,280 ensuring that we look at all the terms of our debt 290 00:20:01,560 --> 00:20:05,280 as a team and go to them for their approval 291 00:20:05,280 --> 00:20:07,080 and resolution and support. 292 00:20:07,080 --> 00:20:09,800 And they have, you know, their market intelligence 293 00:20:09,800 --> 00:20:14,540 that they're able to share with me as well as my team 294 00:20:14,540 --> 00:20:17,640 to make sure even though we're a small nonprofit, 295 00:20:17,640 --> 00:20:21,800 that we have access to some of the best minds 296 00:20:21,800 --> 00:20:26,160 in just commercial industry as it is. 297 00:20:26,160 --> 00:20:29,880 And we tend to work with the big banks historically, 298 00:20:29,880 --> 00:20:34,240 you know, our investors have been, you know, 299 00:20:35,400 --> 00:20:37,000 Bank of America, 300 00:20:37,000 --> 00:20:40,840 Capital One, through syndication, Truist and others. 301 00:20:40,840 --> 00:20:44,380 And that has served us well on the investment side. 302 00:20:44,380 --> 00:20:47,320 And then, you know, our cash and our balance sheet, 303 00:20:47,320 --> 00:20:52,320 we also ensure we lean on kind of insured, 304 00:20:52,420 --> 00:20:54,480 very secure, maybe lower returns, 305 00:20:54,480 --> 00:20:57,840 but we're not gonna take any risks with our cash, 306 00:20:57,840 --> 00:20:59,480 especially in a market like this. 307 00:21:01,080 --> 00:21:03,360 Gotcha, you mentioned Nina's name earlier 308 00:21:03,360 --> 00:21:06,900 when we were first just having a water cooler talk 309 00:21:06,900 --> 00:21:09,760 just catching up and I don't know if you know this, 310 00:21:09,760 --> 00:21:11,880 but I used to be Nina's banker. 311 00:21:11,880 --> 00:21:13,280 My first career out of college 312 00:21:13,280 --> 00:21:15,560 was the relationship manager for App. 313 00:21:17,320 --> 00:21:21,120 That was back in like 2010, 2009, yeah. 314 00:21:21,120 --> 00:21:21,960 Oh, amazing. 315 00:21:21,960 --> 00:21:23,160 Come full circle. 316 00:21:24,080 --> 00:21:25,160 What'd you say? 317 00:21:25,160 --> 00:21:26,500 Well, you go way, way back. 318 00:21:26,500 --> 00:21:27,340 Way back. 319 00:21:27,340 --> 00:21:31,800 I love it, I love it. 320 00:21:31,800 --> 00:21:33,840 Yeah, she's amazing. 321 00:21:33,840 --> 00:21:37,680 I mean, when she retired two years ago 322 00:21:37,680 --> 00:21:40,080 and she would reflect on those early days, 323 00:21:40,080 --> 00:21:43,840 before we had even our first solo new construction project 324 00:21:43,840 --> 00:21:46,640 and how cash was tight and you know better than you. 325 00:21:48,160 --> 00:21:50,200 There were moments, there were moments. 326 00:21:50,200 --> 00:21:51,440 And that, you know what? 327 00:21:51,440 --> 00:21:54,320 And it's now that we're kind of back in the cycle, 328 00:21:56,000 --> 00:21:59,840 we don't ever wanna go and forget what that was like. 329 00:21:59,840 --> 00:22:03,320 And so myself and the board and our staff 330 00:22:03,320 --> 00:22:07,920 are deeply committed to managing through this 331 00:22:07,920 --> 00:22:11,880 and being conservative and protecting App at all costs. 332 00:22:12,960 --> 00:22:16,320 While you're on growth and organizational development, 333 00:22:16,320 --> 00:22:18,520 how are you recruiting talent 334 00:22:18,520 --> 00:22:22,600 and thinking about where App will be in the future? 335 00:22:24,200 --> 00:22:25,840 Yes, that is one of, 336 00:22:25,840 --> 00:22:28,360 I mentioned we talked about our strategic plan 337 00:22:28,360 --> 00:22:30,080 and one of our five world goals 338 00:22:30,080 --> 00:22:32,840 was to be an employer of choice. 339 00:22:32,840 --> 00:22:34,960 So what does that mean for us? 340 00:22:34,960 --> 00:22:39,120 It means compensation and benefits 341 00:22:39,120 --> 00:22:43,360 that we understand the industry, 342 00:22:43,360 --> 00:22:44,440 we've been looking at comps 343 00:22:44,440 --> 00:22:46,000 that we're not underpaying people 344 00:22:46,000 --> 00:22:48,120 and overworking them to burn out. 345 00:22:48,120 --> 00:22:52,800 We are doing professional development investments. 346 00:22:52,800 --> 00:22:54,640 Every member of the App of staff 347 00:22:54,640 --> 00:22:57,700 has a professional development path and growth. 348 00:22:58,620 --> 00:23:02,400 We ensure that we have a diverse workplace. 349 00:23:02,400 --> 00:23:06,040 So, our senior leadership team is equal parts, 350 00:23:06,040 --> 00:23:08,160 black, Latinx and white, 351 00:23:08,160 --> 00:23:12,440 and ensure that that reflects who our residents are. 352 00:23:12,440 --> 00:23:16,000 And we have a staff racial equity diversity committee, 353 00:23:16,000 --> 00:23:18,800 as well as a board staff racial equity committee. 354 00:23:18,800 --> 00:23:21,120 We hired a company to do a racial equity audit 355 00:23:21,120 --> 00:23:23,120 to speak confidentially to every single one 356 00:23:23,120 --> 00:23:25,160 of the App employees to say, 357 00:23:25,160 --> 00:23:28,560 is App a really walk in the walk? 358 00:23:28,560 --> 00:23:29,680 In terms of how we say, 359 00:23:29,680 --> 00:23:30,960 if we wanna show up and we're an employer, 360 00:23:30,960 --> 00:23:32,280 where are our pinch points? 361 00:23:32,280 --> 00:23:34,240 And then we know where we need to work. 362 00:23:34,240 --> 00:23:37,400 So I think all of that is how we're gonna recruit 363 00:23:37,400 --> 00:23:38,860 and keep good people, 364 00:23:38,860 --> 00:23:43,860 because people wanna feel valued, invested in, compensated, 365 00:23:46,040 --> 00:23:50,360 but then they wanna work for a place that is authentic 366 00:23:50,360 --> 00:23:51,780 and is living its values. 367 00:23:52,840 --> 00:23:54,200 And it's pretty powerful that you guys 368 00:23:54,200 --> 00:23:56,720 were gonna bring in a third party to do that, right? 369 00:23:56,720 --> 00:23:58,480 That says a lot about leadership. 370 00:23:58,480 --> 00:23:59,800 That we really do care. 371 00:23:59,800 --> 00:24:01,420 We want an independent voice to let us know, 372 00:24:01,420 --> 00:24:02,960 how are we doing? 373 00:24:02,960 --> 00:24:06,640 I think as an employee, that speaks volumes as well, 374 00:24:06,640 --> 00:24:08,880 to see that happening and to be curious. 375 00:24:08,880 --> 00:24:10,320 I think you'll naturally be curious 376 00:24:10,320 --> 00:24:11,360 to see what happens next. 377 00:24:11,360 --> 00:24:14,920 Like, okay, this firm's really about what the mission is. 378 00:24:14,920 --> 00:24:16,600 That's pretty powerful. 379 00:24:16,600 --> 00:24:17,640 I appreciate it. 380 00:24:17,640 --> 00:24:19,440 Kudos to you and your team for that. 381 00:24:19,440 --> 00:24:20,280 Thank you. 382 00:24:22,040 --> 00:24:24,080 You said something that kind of sparked another question. 383 00:24:24,080 --> 00:24:26,880 You mentioned cash and balance sheet. 384 00:24:26,880 --> 00:24:30,160 And I know we do talk to, not just our younger developer, 385 00:24:30,160 --> 00:24:33,800 but even the developers that we've had on the series, 386 00:24:33,800 --> 00:24:36,840 guarantees, network, liquidity, 387 00:24:36,840 --> 00:24:39,360 typical challenges that they seem to still face, 388 00:24:39,360 --> 00:24:41,960 even though eventually they overcome them. 389 00:24:41,960 --> 00:24:43,840 For OPA, I guess in the early days, 390 00:24:43,840 --> 00:24:46,720 were you able to, or actually basically, 391 00:24:46,720 --> 00:24:48,480 as how did you overcome those challenges? 392 00:24:48,480 --> 00:24:51,000 I don't know if it was from doing enough joint ventures 393 00:24:51,000 --> 00:24:52,440 until you finally had the balance sheet, 394 00:24:52,440 --> 00:24:57,180 or were you all pretty well funded from the start? 395 00:24:57,180 --> 00:24:59,200 No, we definitely struggled. 396 00:24:59,200 --> 00:25:01,800 I mean, I think when Nina first came on and curbed in, 397 00:25:01,800 --> 00:25:05,240 those better than me, there was no capacity, 398 00:25:05,240 --> 00:25:08,500 which is why we hadn't really done our own deals. 399 00:25:08,500 --> 00:25:10,600 Our first deal was with a JV 400 00:25:10,600 --> 00:25:12,640 where they could post all the guarantees. 401 00:25:12,640 --> 00:25:15,600 This, the first out of the ground deal, 402 00:25:15,600 --> 00:25:18,360 Arlene Tamil was with Bank of America. 403 00:25:18,360 --> 00:25:23,360 And we, from there, the balance sheet's really been developed 404 00:25:23,960 --> 00:25:25,120 through developer fee. 405 00:25:25,120 --> 00:25:30,120 These, the new construction projects have given APA, 406 00:25:30,760 --> 00:25:33,080 fortunately, developer fee that we've been able to use 407 00:25:33,080 --> 00:25:33,920 to grow the balance sheet, 408 00:25:33,920 --> 00:25:36,960 and that's where we are able to then take, 409 00:25:36,960 --> 00:25:39,160 use that money for pre-development, 410 00:25:39,160 --> 00:25:41,800 as well as to post letters of credit, 411 00:25:41,800 --> 00:25:46,600 as well as the guarantees that we need to do it. 412 00:25:46,600 --> 00:25:50,120 I will say, one really great thing that happened last year 413 00:25:50,120 --> 00:25:54,040 was APA won a $5 million Capital Magnet Fund Award 414 00:25:54,040 --> 00:25:55,440 for the US Treasury, 415 00:25:55,440 --> 00:25:58,960 and that was the first help outside of our own 416 00:25:58,960 --> 00:26:01,660 blood, sweat, and tears of developer fee 417 00:26:01,660 --> 00:26:05,180 to bolster up the balance sheet, which was great. 418 00:26:05,180 --> 00:26:10,180 And we would love to have that happen again. 419 00:26:10,240 --> 00:26:13,500 I know it's a source that's highly competitive, 420 00:26:13,500 --> 00:26:18,500 and I think capital is, and cheap capital 421 00:26:19,120 --> 00:26:22,300 is something that, it frankly hinders us. 422 00:26:22,300 --> 00:26:26,040 We could even do more, but for those limitations. 423 00:26:27,080 --> 00:26:30,040 I would also just wanted to touch base on, 424 00:26:30,040 --> 00:26:32,800 because we've heard some real hard stories 425 00:26:32,800 --> 00:26:35,480 with regards to projects that were under construction 426 00:26:35,480 --> 00:26:38,620 through the pandemic period with the supply chain, 427 00:26:38,620 --> 00:26:42,000 supplies, heard some real nightmares about debt 428 00:26:42,000 --> 00:26:44,600 getting resized on the perm loan, 429 00:26:45,840 --> 00:26:47,560 negative tax credit adjusted 430 00:26:47,560 --> 00:26:49,760 because it was just taking too long. 431 00:26:49,760 --> 00:26:52,140 How did you all fare during that time 432 00:26:52,140 --> 00:26:55,040 for stuff that you may have had already under construction? 433 00:26:56,120 --> 00:26:59,640 I have to say, we were really, really fortunate. 434 00:26:59,640 --> 00:27:03,600 All three of our projects did really well. 435 00:27:04,960 --> 00:27:08,180 Queens Court, which was our biggest project ever, 436 00:27:10,040 --> 00:27:12,480 was halfway through construction when COVID hit, 437 00:27:12,480 --> 00:27:16,260 and that delivered pretty much on schedule. 438 00:27:16,260 --> 00:27:19,120 Another project, this was interesting, 439 00:27:19,120 --> 00:27:21,680 we closed May of 2020, 440 00:27:21,680 --> 00:27:26,680 so right after the pandemic hit, and that was rough. 441 00:27:26,840 --> 00:27:31,320 I think investors at that time, and it was a large deal, 442 00:27:31,320 --> 00:27:33,720 a 160 unit veteran deal, 443 00:27:33,720 --> 00:27:38,140 and Apple was in for five million of pre-development 444 00:27:38,140 --> 00:27:40,040 that we had to get to closing, 445 00:27:40,040 --> 00:27:44,040 and we are very fortunate that our investors stuck with us. 446 00:27:44,040 --> 00:27:48,880 That was NES, CAP one, and they said to us, 447 00:27:48,880 --> 00:27:52,320 we want to close, we want to see you buy out the whole project 448 00:27:52,320 --> 00:27:55,080 because we don't want supply chain to come, 449 00:27:56,520 --> 00:27:58,200 to hurt us down the road. 450 00:27:58,200 --> 00:28:00,880 We were complained, and we were, and our contractors, 451 00:28:00,880 --> 00:28:04,640 we've never done this in 40 years, this is insanity. 452 00:28:04,640 --> 00:28:05,680 It actually saved us. 453 00:28:05,680 --> 00:28:08,980 We had savings on the job at the end of the deal. 454 00:28:09,880 --> 00:28:11,600 We relatively hit it on time, 455 00:28:11,600 --> 00:28:14,440 so don't tell CAP one I said that, 456 00:28:14,440 --> 00:28:15,560 but it worked out. 457 00:28:15,560 --> 00:28:20,560 We won't have CAP one on, we already have in there. 458 00:28:26,120 --> 00:28:30,800 Carmen, where do you see APA from a development standpoint 459 00:28:30,800 --> 00:28:31,640 in the next five years? 460 00:28:31,640 --> 00:28:34,520 I know you've entered Montgomery County, DC, Fairfax, 461 00:28:34,520 --> 00:28:36,520 you're in Arlington County, what's next? 462 00:28:37,800 --> 00:28:40,080 Well, again, you really hit this question 463 00:28:40,080 --> 00:28:43,200 at a really timely moment with our five-year plan. 464 00:28:43,200 --> 00:28:45,840 We have to figure that out because we have to plan 465 00:28:45,840 --> 00:28:47,280 for what we would look like, 466 00:28:47,280 --> 00:28:50,360 and our goal is to have 7,500 units, 467 00:28:51,800 --> 00:28:56,120 either under ownership or under construction at that point, 468 00:28:56,120 --> 00:28:58,040 and we're 2,300 today. 469 00:28:58,040 --> 00:29:03,040 So that means we're looking at tremendous growth, 470 00:29:03,640 --> 00:29:05,760 some of it's at the acquisition, 471 00:29:05,760 --> 00:29:07,600 a lot of it'll be new construction. 472 00:29:07,600 --> 00:29:12,160 We have about 1,500, so we have the 2,300 units today, 473 00:29:12,160 --> 00:29:15,040 500 under construction, 1,500 that we wanna close on 474 00:29:15,040 --> 00:29:18,960 in the next year, and beyond that, the following years, 475 00:29:18,960 --> 00:29:20,840 and it's all gonna be in the DMV. 476 00:29:20,840 --> 00:29:23,520 We have a lot more work to do 477 00:29:23,520 --> 00:29:27,960 in the three jurisdictions to go deep, 478 00:29:29,360 --> 00:29:33,200 and long, long-term, that'll be the next plan, 479 00:29:33,200 --> 00:29:35,760 but for the next five years, that'll keep us busy. 480 00:29:35,760 --> 00:29:36,600 Nice. 481 00:29:36,600 --> 00:29:39,320 Just really, I mean, I think for us, 482 00:29:39,320 --> 00:29:43,280 you need to make big investments in technology, 483 00:29:43,280 --> 00:29:46,560 in accounting, in property management, 484 00:29:46,560 --> 00:29:49,480 in asset management to make that kind of growth successful. 485 00:29:49,480 --> 00:29:52,120 So while we're looking for deals, 486 00:29:52,120 --> 00:29:55,600 we're also trying to invest in that and in the bench 487 00:29:55,600 --> 00:30:00,600 because that is, we don't wanna compromise on the quality 488 00:30:02,160 --> 00:30:05,520 and on the health and the modernization of the process. 489 00:30:05,520 --> 00:30:08,360 Good stuff. 490 00:30:08,360 --> 00:30:09,200 Got it. 491 00:30:09,200 --> 00:30:11,080 So I think that pretty much wraps us up, Carmen. 492 00:30:11,080 --> 00:30:13,400 We certainly appreciate you stopping by the shop today 493 00:30:13,400 --> 00:30:16,800 and talking shop with us on the real estate shop 494 00:30:16,800 --> 00:30:18,880 and much future success. 495 00:30:18,880 --> 00:30:19,880 It's a small industry. 496 00:30:19,880 --> 00:30:22,080 I'm sure we'll bump into each other, 497 00:30:22,080 --> 00:30:23,600 folks are now out and about. 498 00:30:23,600 --> 00:30:26,120 Now the pandemic is somewhat behind us. 499 00:30:26,120 --> 00:30:30,320 So thanks for joining us and we'll see you in the future. 500 00:30:30,320 --> 00:30:31,160 Thank you both. 501 00:30:31,160 --> 00:30:33,720 I'm honored to have been invited. 502 00:30:33,720 --> 00:30:36,680 Thanks Carmen, good seeing you. 503 00:30:36,680 --> 00:30:37,520 All right. 504 00:30:37,520 --> 00:30:38,360 Yeah. 505 00:30:38,360 --> 00:30:39,840 Another day at the shop, 506 00:30:39,840 --> 00:31:04,200 content they can't get anywhere else.