2017 Annual Report

Concept/Design: Suka NY/sukacreative.com

2017 Annual Report


Scroll Down

Small Buildings

Small Buildings, Big Impact

About one-third of rental housing in the U.S. is contained in buildings with 5 to 49 units. Buildings in this category are often referred to as small buildings, and they play a big part in the housing puzzle. Often privately owned, this housing stock tends to be older and typically provides an anchor for neighborhoods by meeting the affordability needs of low-, moderate-, and middle-income families. Unfortunately, owners of small buildings tend to operate on thin margins, and as the buildings age, maintenance costs compound, making access to capital sources a paramount issue.

Did you know..

Did you know…CPC has partnered with New York State Homes & Community Renewal (HCR) since 1992, and in Fiscal Year 2017 alone, created or preserved 584 rental units.

At CPC, we provide innovative capital solutions to address the complex needs of owners and developers of multifamily properties. We utilize our deep, strategic relationships to offer the financial resources necessary to keep properties financially and physically sound. Staying true to this mission-driven approach to lending, in our 2017 Fiscal Year we expanded our toolbox of permanent lending products to help meet the unique needs of small building owners and developers. Highlights of this include:

  • Forging new partnerships with the Federal Housing Administration (FHA) and the Government National Mortgage Association (Ginnie Mae) to bring borrowers new sources of long-term, fixed-rate capital, including FHA’s 223(f), which provided acquisition and refinance opportunities for existing multifamily buildings.
  • Using products such as Freddie Mac’s Targeted Affordable Housing (TAH) program with a new government partner—the Albany Housing Authority—to help preserve 142 units of affordable housing in the Capital Region.
  • Extending our impact by bringing the Freddie Mac Small Balance Loan (SBL) product to new borrowers in New Jersey and Pennsylvania.

As part of CPC’s commitment to revitalizing the Capital Region’s small building housing stock, four dilapidated buildings in a neglected section that connects Albany’s downtown and its bustling warehouse district are about to be historically restored to create 15 units of stable housing. Once completed, the buildings will offer one- and two-bedroom apartments affordable to the local community, as well as approximately 900 square feet of off-street parking in two adjacent lots.

The gut-rehabilitation of 800-804 Broadway—the first renewal project on its block—will serve as a catalyst for the ongoing revitalization of “New Broadway,” which is part of the larger Arbor Hill neighborhood. The City of Albany has identified Arbor Hill as a key focus area and has already dedicated $75 million toward its renewal.

  • 15 units of housing for families earning 60%–80% of Area Median Income (AMI)
  • Developed by 800 Broadway LLC
  • $1.53 million CPC construction loan accompanied by a State of New York Mortgage Agency (SONYMA)-insured permanent loan provided through the New York State Common Retirement Fund (CRF)

56 Sheridan Avenue

56 Sheridan Avenue Albany, New York

Walier Lofts

755 North Salina Street Syracuse, New York

CPC’s commitment to small buildings through the preservation of existing buildings is helping to enhance the stock of mixed-use properties in urban centers across the region. Financing of this type of deal is integral to catalyzing downtown economic development. One such property is 56 Sheridan Avenue, a historic three-story, 3,700-square-foot walk-up building that was once a public school in the heart of downtown Albany. The $450,000 construction loan provided by CPC, which was accompanied by a SONYMA-insured permanent loan provided through CRF, helped transform this run-down building into five units of naturally affordable rental housing anchored by commercial space on the ground floor.

When the current owners of the Walier Lofts—a 14-unit mixed-use building located in Syracuse, New York—acquired this property in September 2015, it was experiencing higher-than-normal operating expenses, lower-than-expected occupancy, and the need for some basic capital improvements. Committed to preserving the stock of small multifamily buildings, CPC provided a $1.58 million SBL loan to refinance the owner’s original mortgage. Built in 1890, the historically preserved four-story building is now fully occupied and breathing life back into the heart of Syracuse’s historic Little Italy neighborhood.

Investing in Long-Term
Community Stability

Responsible, long-term ownership of multifamily buildings in underserved or changing neighborhoods can help preserve housing affordability, reduce displacement, and serve as a force for stabilizing and revitalizing the community. Whether acting as a lender or an equity partner, CPC provides capital to promote long-term ownership that delivers on these benefits.

As a lender, we provide Long-Term Fixed-Rate mortgages that give our borrowers the capital they require to ensure that long-term maintenance and operations needs can be addressed and that the financial stability of a property is safeguarded. As an owner, we invest capital through our equity investing platform, giving us a seat at the table to act as ambassadors of affordability and advocates for well-maintained infrastructure.

Did you know..

Did you know…CPC has partnered with SONYMA to provide mortgage insurance for our loans since the early 80s.

CPC’s investment in preserving the Parkchester complex in the Bronx is our flagship example of how long-term, mission-driven investments in multifamily housing can be a catalyst for stability and provide a haven of affordability for communities. With our ownership partners in the 12,271-unit complex, we have been able to leverage our investment and experience to ensure the long-term physical and financial well-being of this naturally affordable community.

Modeled on the idea that long-term ownership helps create community stability and affordability, CPC’s equity investing platform enables us to invest alongside like-minded partners in multifamily housing to ensure that the positive impact of long-term ownership is realized. In our 2017 Fiscal Year, we closed the first three equity deals in our pipeline, totaling $5.8 million. This investment spanned the state of New York, with two projects in Brooklyn for a combined 631 units, and 72 new units at Charlotte Square in Rochester.

These investments enabled us to deploy capital and acquire ownership stakes in affordable multifamily properties located in high-opportunity areas and transform them into vibrant developments for working individuals and families.

The first project in our new equity investing platform, Charlotte Square exemplifies our commitment to investing alongside like-minded partners in multifamily housing to ensure the positive social benefits of long-term stable ownership. Since 1993, CPC has provided more than $90 million in lending capital to finance 55 multifamily buildings in Rochester. CPC’s new equity platform gives us another tool to diversify how we invest in the long-term stability of communities. By using our capital to finance Charlotte Square, we were able to advance our commitment to responsible ownership and create deeper impact in the community by supporting the economic development goals set by the City of Rochester to develop the Inner Loop.

Serving as an anchor to the East End community, Charlotte Square Phase 1 brought 72 newly constructed rental apartments to downtown Rochester. With our partners, Home Leasing, the project won an RFP from the City of Rochester in 2015 to develop longtime vacant land known as the Inner Loop. This transformational, multiphase project is converting a sunken expressway to the east of Downtown into a thriving, walkable community. The project is one of two LEED Gold–certified multifamily buildings in the Greater Rochester Area.

  • 72 units of multifamily housing
  • Developed in partnership with Home Leasing
  • $18 million development project financed in partnership with M&T Bank

Rolling Ridge Apartments

9 Denise Drive Latham, New York

Through the relationships we maintain with our borrowers, and the robust toolkit of lending products we offer them, CPC’s commitment to long-term stable ownership extends through our lending platform. With multiple fixed- and floating-rate mortgage options, we are able to create customized loan opportunities that ensure our borrowers have the capital needed for maintenance and operations, and that their ownership creates housing that remains affordable to their communities. In Latham, New York—a northern suburb of Albany—our borrowers of over 15 years were able to refinance an existing CPC Freddie Mac loan on the Rolling Ridge Apartments, which will preserve the quality and stability of the 99-unit garden-style apartment complex. The $5 million loan, which is being provided by CPC using Freddie Mac’s SBL product, enables the building owners to refinance at a favorable rate, helping to preserve the property’s affordability for its current and future tenants for years to come.

Commitment to Affordable Housing

The Lofts on Main is a unique and affordable artist community in the heart of Peekskill’s Artist District, an area that has become a regional arts and entertainment destination. Scheduled for completion in January 2018, the three-story, mixed-use building calls for 50 below-market (60% AMI) loft-style apartments for artists and 24 market-rate units for non-artists, as well as ground floor retail space, a rooftop courtyard, fitness room, laundry facilities, and gallery and performance space.

This project showcases CPC’s unique ability to proactively pool funding sources from local, state, and federal levels in order to ensure the deep affordability needed to create housing that is in line with the development goals of the communities we serve. The $15.5 million construction loan includes Community Development funds from the City of Peekskill (CHEIR funds), Middle Income Program (MIP) funds, a New York State Energy Research and Development Authority (NYSERDA) grant, and Brownfields Tax Credits, as well as an $8.5 million participation from Putnam County Savings Bank and Low Income Housing Tax Credits (LIHTC). This was accompanied by a permanent loan provided by CPC through its partnership with Wespath Benefits and Investments’ Positive Social Purpose Lending Program (PSP). It is the fourth project CPC has financed in Peekskill’s burgeoning arts district and an example of how CPC partners with communities to meet unique housing needs.

Did you know..

Did you know…In Fiscal Year 2017, Wespath Benefits and Investments provided permanent financing for 119 units of low-income housing.

  • Created 50 units of low-income housing for artists earning at or below 60% AMI and 24 market-rate units
  • Developed by Lofts on Main Limited Partnership
  • $15.45 million construction and permanent loan provided by CPC through partnerships with HCR, the City of Peekskill, Putnam County Savings Bank, and Wespath Benefits and Investments
  • Designed to meet Energy Star Certification and will receive NYSERDA grant for incorporating energy-efficiency measures

Antioch Homes

175, 165 and 147 Railroad Avenue Bedford Hills, New York

569 Prospect Avenue

569-575 Prospect Avenue Bronx, New York

Habitat for Humanity, SEED

408 Thomas Boyland Street Brooklyn, New York

In the Hudson Valley, 12 units of housing for low-income families earning at or below 60% of AMI are being built through a partnership between Antioch Housing Development Fund (HDFC), the Housing Action Council (HAC), the Town of Bedford Hills, and CPC. The project includes new construction of two buildings and the conversion of a vacant church that, originally built by church members in the late 1800s, served as the congregation’s home until 1975. To execute on the town and church’s vision, CPC provided a $1.3 million construction loan, and was able to pull an additional $2.3 million in various grants provided through a Community Development Block Grant (CDGB), a Westchester Company Land Acquisition Grant, and a Westchester County HIF Grant, for a total $3.5 million in funding. The construction loan is accompanied by an $875,000 permanent loan funded by CPC’s agreement with CRF. Local nonprofits and faith-based organizations face unique challenges as mission-driven organizations that may not have the real estate experience needed to get a project to the finish line. In this case, CPC’s technical assistance and expertise in pulling together a financing package with multiple sources and partners enabled this congregation to bring 12 deeply affordable units on line.

569 Prospect Avenue is being supported by the New York City Department of Housing Preservation and Development (HPD) under its Neighborhood Construction Program (NCP), which is designed to use smaller, challenging development sites to create new affordable rental housing for low-, moderate-, and middle-income households. Always committed to working with our government partners to achieve our mutual housing affordability goals, CPC provided a $7.64 million construction loan that was accompanied by $5.6 million of funding through HPD, for a total of $13.2 million. In addition to a regulatory agreement that will ensure affordability, a long-term permanent loan through our funding agreement with the New York City Employees’ Retirement System (NYCRS) will help to ensure the stability and quality of housing for years to come. When this seven-story elevator building is completed, 45 New Yorkers will have new, affordable apartments to call home. With 16 units limited to 70% AMI and 28 limited to 90% AMI, Community District 1 in the Bronx will have another small building helping to preserve affordability.

At CPC, we believe that every person deserves a safe and affordable place to live, in a neighborhood that provides opportunities to get ahead. In challenging housing markets, such as New York City, providing affordable homeownership opportunities to those who need it most requires a collaborative approach.

Did you know..

Did you know…Since 1974, CPC and HPD have partnered on 940 loans, investing a total of $3.02 billion to create 44,618 units of affordable housing.

In early 2017, nonprofit Habitat for Humanity New York City (Habitat NY) and co-developer Latent Productions broke ground on Seed, a three-building affordable housing development in the Brownsville section of Brooklyn. When completed, Seed will enable 25 hardworking individuals and families to become first-time homeowners. Seed offers a mix of one-, two-, and three-bedroom energy-efficient units that will be affordable for low-income working families. The $11 million development includes funding from HCR and HPD, and is one of the first projects to be financed under a $70 million joint funding partnership between CPC and Goldman Sachs. When completed, this project will earn Enterprise Green Community certification.

Housing as an Economic Driver

Once sites of economic prosperity, many old factories and other industrial buildings in Upstate New York have fallen into disrepair and neglect. CPC is proud to have a proven track record of working with public and private partners to support the revitalization and economic development goals of local municipalities. Through this collaboration, we work with our borrowers to transform these blighted buildings into housing and commercial space that serve as an anchor to revive downtown centers.

A beautiful example of CPC’s long-standing commitment to the reuse of these historic buildings is the nearly $28 million adaptive redevelopment of the R.E. Dietz lantern factory in Syracuse’s up-and-coming Park Avenue neighborhood. CPC and its lending partners, Pathfinder Bank and NBT Bank, provided the construction loan to transform this largely vacant, historic building into 92 new apartments, 37,500 square feet of commercial space, and 106 enclosed parking spaces. The apartments, which have an industrial feel, feature large windows, high ceilings, brick walls, and exposed wooden beams and support posts as a reminder of the building’s historic past.

Did you know..

Did you know…Over our 26-year relationship, CPC has leveraged $784.6 million of CRF dollars across 484 projects to finance 19,267 housing units.

Located across the street from Leavenworth Park, “The Dietz” extends a growing trend in Syracuse toward the redevelopment of former industrial buildings into mixed-use facilities that revitalize the area by connecting the Syracuse Lakefront, Near Westside’s SALT district, and the Syracuse central business district.

  • 92 rental apartment units and 37,500 square feet of commercial space created
  • Developed by Bradford & Euclid, LLC and Paulus Development Company
  • $19.2 million construction loan provided by CPC through participations with Pathfinder Bank and NBT Bank
  • $16.2 million permanent loan funded by CPC through its agreement with CRF
  • Additional funding provided through grants from Empire State Development and Onondaga County, as well as historic tax credits from New York State Historic Preservation Office (SHPO) and National Park Service

Oak School Lofts

266 Oak Street Buffalo, New York

The Lincoln Alliance Building

183 East Main Street Rochester, New York

Alexandre Apartments

510 Washington Street Buffalo, New York

The Millennia Building

22 Burling Lane New Rochelle, New York

CPC recently delivered a $2.32 million Freddie Mac SBL loan to the Oak School Lofts in Buffalo, a former school building that was renovated in 2005 to create 29 apartments. Whether you’re in downtown or the suburbs, small residential buildings play a critical role in the housing stock of the community. CPC is focused on its core mission of addressing the gap in the market for flexible lending products to help our borrowers tackle complicated transactions and give them more choices, better terms, and a more efficient process that helps meet their needs.

CPC’s ongoing commitment to downtown redevelopment was seen earlier this fiscal year when it provided a $13.9 million construction loan to convert the 87-year-old Lincoln Alliance Building into 130 market-rate apartment units and approximately 25,000 square feet of commercial and retail space. Located in the epicenter of Downtown Rochester, this now-restored 15-story architectural landmark is one-half block away from the Midtown Rochester Rising development site. The renovation promises to be one of the largest historic rehabilitations in Upstate New York.

The rise of “live-work-play” neighborhoods is gaining momentum in Downtown Buffalo with the historic redevelopment of the Loew’s Theatre warehouse into the seven-story Alexandre Apartments. CPC provided a $2.8 million construction loan and a $2 million SONYMA-insured permanent loan through our CRF funding agreement to convert this once-vacant building into 12 loft-style, market-rate apartments and nearly 1,400 square feet of commercial/retail space. Conveniently located, the building is a short walk to the Metro Rail and within walking and biking distance to business and entertainment.

June 2017 marked the start of construction for The Millennia, a 110-unit multifamily complex in New Rochelle, New York, being developed by ELD Properties. Since 1994, CPC has financed more than 50 multifamily projects totaling more than 1,100 units in New Rochelle. We understand the importance of investing in projects that advance the City’s ambitious initiative to develop a transit-oriented downtown that is livable, economically diverse, and affordable to a wide range of incomes. CPC, with participant lender, Tompkins Mahopac Bank, provided a $27 million construction loan for the six-story, 130,000-square-foot building located one block from the New Rochelle Transit Center.

Leading the Market to
Energy Efficiency

This year, CPC memorialized our green underwriting methodology through the creation of Underwriting Efficiency: A Mortgage Lender’s Handbook for Realizing Energy and Water Efficiency Opportunities in Multifamily Housing.

Underwriting Efficiency

The handbook, which was developed in collaboration with private and public partners, is quickly becoming the go-to resource for lenders on the tangible benefits of efficiency measures, how to discuss the topic with owners, and steps for incorporating the savings into the underwriting process.

Our innovative financing strategy allows borrowers to take on additional debt to pay for energy-efficiency upgrades by leveraging the forecasted utility savings from those upgrades. Underwriting the potential savings and providing additional low-cost, long-term capital in the mortgage can help break down the financial barriers that building owners of all sizes currently face.

By promoting the inclusion of energy and water retrofit measures into first mortgage financing, CPC is helping to transform the long-term economic stability of multifamily housing from the inside out. Energy- and water-efficiency improvements can save money by reducing annual energy bills by 15%–30% and water bills by 15%–50%. The savings from energy-efficient property improvements can be leveraged to reduce subsidy burden and mitigate the need to increase rents—critical aspects in the preservation of affordability in our communities. At the same time, “greener” buildings also provide non-energy benefits, such as a healthier living environment for residents and the community.

As a mortgage lender, we know it is important to be honest about realities and risks, which is why we are proud of the step-by-step framework outlined in our Handbook. Through the checklists and success stories, other lending institutions can see examples of how to improve efficiency based on financing goals and how to implement an underwriting process that allows for the integration of energy-efficiency savings. The sooner our industry adopts this type of forward thinking, the sooner we can prepare for even more dramatic solutions that are emerging, such as passive house design, zero-energy homes, and renewables.

Once written off as outdated relics of an industrial age, our historic downtowns are experiencing a renaissance as former manufacturing buildings find new life as mixed-use residential buildings. People are experiencing a renewed sense of place in downtown communities, spurred by new housing with retail, entertainment, and other neighborhood amenities only steps away from their apartments.

This type of historic preservation project offers the perfect opportunity to introduce energy-efficiency measures that can provide a host of long-term benefits for owners, residents, and communities.

In the Niagara Street Corridor, an area once characterized by aging warehouses, CPC is investing in projects that are serving as catalysts for this resurgence, like the Mentholatum Building—an 81,700-square-foot former factory that has been transformed into 49 new apartments and new commercial space. Boasting a high-efficiency HVAC system, double-paned window treatments, and other energy-efficiency measures, the savings garnered by these sustainable systems will play a role in the long-term economic stability of the building.

Where others saw a vacant factory, our borrowers saw the potential to help attract new residents and new investment to serve as an anchor to this growing community. At CPC, we understand the commitment it takes to get projects like this off the ground, and we work to help our borrowers achieve their vision.

  • 49 units of quality, loft-style housing
  • Developed by 1360 Niagara Street, LLC
  • $14.3 million CPC construction loan
  • SONYMA-insured CPC permanent loan funded through our CRF agreement
  • Significant Historic Tax Credit Investment crucial to project viability
  • A number of measures employed to increase the building’s energy efficiency, far exceeding standards set by the New York State Energy Code

Big Tree Glen

3727 West Main Street Batavia, New York

850 Longwood Avenue

850 Longwood Avenue Bronx, New York

CPC recently provided Conifer Realty LLC a $1.22 million construction loan accompanied by a permanent mortgage through our CRF funding agreement to create Big Tree Glen, a new complex of 56 affordable housing units for families in Batavia, New York. In addition to these funding sources, the loan included LIHTC credits and received a NYSERDA Low-Rise Multifamily Building grant for meeting the Energy Star 3.1 Certification standards. Forty-four apartments will be reserved for families earning less than 50% of AMI and 12 apartments will serve families earning less than 60% of AMI, helping to ensure working residents have quality housing to call home.

CPC provided a $6.24 million permanent loan through our partnership with Wespath Benefits and Investments to refinance the mortgage at 850 Longwood Avenue. This gave our long-time partner, the Banana Kelly Community Improvement Association, the ability to cash out equity to complete a long-planned rehabilitation of 36 units of low-income affordable housing. The project scope included water conservation measures and upgraded communal area lighting, which will lower operating costs, ensuring housing affordability for years to come. Now complete, this six-story walk-up building in the South Bronx is both physically and financially stable and its tenants can be assured that their homes will be affordable for the long term.