New Winn CEO Seeks Winning Affordable Formula
Gilbert Winn, 36, the newly appointed CEO of the WinnCos (the nation’s largest owner/manager of affordable and military housing) also is looking for new resources to fund lower-priced housing production, he tells us. Tax breaks are good if they last for the life of a 30-year mortgage. Free public land might represent only 10% to 20% of total development cost; not enough to close the financial gap. Other strategies: a lower hourly labor rate for affordable construction and converting/renovating existing housing stock to affordable housing, which is less costly than building new, Gilbert says.
In developing mixed-income projects like The Residences at Brighton Marine where Winn expects to start 14 months of construction Q1 ’16, he’s investigating various tax credit vehicles. When syndicated, the credits have the strongest prices ever, Gilbert tells us. Institutional investors are eager to snap up the credits, especially on assets with federal Section 8 subsidies (some properties are trading at 5% cap rates). But with construction costs rising and affordable rents stagnating, Gil is trying to find more historic and new market tax credits to make ends meet. At the same time, as a partner in the $250M Roseview WinnResidential Fund I, the company is expanding activity in the market rate sector. For its first investment in the Atlanta area, it purchased Park 156 in Lawrenceville (above) and Merritt at Sugarloaf in Duluth. In the Dallas/Fort Worth area, the fund is spending $100M to buy 1,000 B-minus units that the team will upgrade to A-minus. By the end of March, Gilbert expects the fund to be fully invested in value-add deals that it will hold for five to seven years.