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MMA Financial, LLC A MuniMae Company

Learn about effective strategies to sell property before Year 15 to maximize fund yield, reduce risk, attract new capital and management, and take advantage of market opportunities. Presented by Michael H. Gladstone, Esq. at IPED in Boston, MA on October 11, 2007.

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MMA Financial, LLC A MuniMae Company

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  1. MMA Financial, LLCA MuniMae Company Sale Strategies Presented By Michael H. Gladstone, Esq. IPED – Boston, MA. October 11, 2007

  2. Sell Property Before Y15 • Is property key to fund yield? • Reduce risk by selling • New capital • New management • Bond • Indemnities • Buyer is more important than price

  3. A Pre-Year 15 Exit • Selling before Year 15: balancing act • But generally not before Year 13

  4. A Pre-Year 15 Exit • Pros • Take advantage of market opportunities • Strike while iron is hot • Reduce expenses • Reduce exposures

  5. A Pre-Year 15 Exit • Cons • Buyer may not comply with rules • Difficult to monitor (but if we finance buyer…) • Bonding expenses

  6. Case Study – Sale as Workout Strategy • Hayden Pointe Apartments (Las Vegas) • 252 unit garden-style • MMA took over as GP in 2000 • Deficits of $400,000 per year • $ 715,000 in LIHTC per year • 2 years remaining credits

  7. Case Study con’t. • Options: 1. Sell some fund credits (coupled with default refunding/refinancing of property) • Sell property Investor favored sale

  8. Case Study con’t. • Forbearance Agreement with Lender • Sale paid Lender in full • Modest distribution to Fund • Received 85% of LIHTC • Strong, reliable buyer • Avoided recapture

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