1. THE SUPPORTIVE HOUSING NETWORK 2017 ANNUAL CONFERENCE Preservation Panel June 1, Arlo M. Chase Services for the UnderServed

2. Introduction to SUS
SUS is a New York not-for-profit, 501(c)(3) social service provider founded in 1978
Provide housing and services to a broad range of populations:
Persons with mental illness
Persons with intellectual and/or developmental disabilities
Person experiencing homelessness
Persons with HIV/AIDS
Veterans
Operate in all 5 boroughs serving over 25,000 individuals every year
Geographic concentrations in Central Brooklyn, East Harlem, and the West Bronx
Employ nearly 2,000 people full time, with an operating budget of $190M
Own or lease 120 buildings, with close to 1.7 million square feet under control (including residential, program and office).

3. SUS Existing LIHTC/Supportive Housing
Among the three largest providers supportive housing in New York State
We provide permanent housing for more than 2,200 New Yorkers
1200 scatter site apartments
16 leased buildings developed with LIHTC, with over 730 apartments of permanent supportive and affordable housing
Range in % of supportive population from 30% (in construction) to 100%
LIHTC Pipeline
Four projects in construction (320 units)
Four more in pre-development (750 units+)

4. SUS LIHTC Pipeline: New v. Old
Palladia Merger: December 2014
9 LIHTC properties
Result: 2 different portfolios:
New Construction with heavy PB Section 8 (SUS portfolio)
Mod Rehab with less rent/operating subsidy (Palladia portfolio)
Newer
Private debt (both 4% and 9%)
Bigger properties/new construction
Private acquisition of land or RFPs
More Joint Ventures
Older
City land
Smaller
Mod rehabs
No hard debt

6. Year 15 goals 4 Overarching goals for our Year 15 Portfolio
Provide quality housing for our residents
Preserve and maintain our existing real estate assets
Use our size to create economies of scale and improve efficiency of operations
Create value and cash flow for the parent entity (SUS Inc.).

7. Year 15: Strategic Considerations
DIVERGENT YEAR 15 PORTFOLIO
Stratford Ave., Dreitzer House, & New Life Homes (entering year 15 with healthy reserves and adequate cash flow)
Goal: Manage to year 15 exit with healthy recapitalization and cash to the parent entity.
Consideration: Investor expectation of reserves.
Struggling Older LPs (Chelsea Court, Cedar Tremont, Boston Road, and Flora Vista)
Two of these DHCR funded properties are already through Year 15. They are all are cash flow neutral and have significant deferred capital needs.
Goal: Evaluate a pooled HPD year 15 participation to enable a recapitalization

8. Getting Ready for Year 15: Asset Management Strategies
Improve data collection and financial analysis of financial condition of LPs
implement dashboard to allow for rigorous and regular financial oversight of LPs
Increase focus on rent collection and implementing allowable rent increases
Properly capture and allocate shared costs (central maintenance, executive)
Properly balance centralized management and empowering property staff
Routinize preventive maintenance and complete internal capital assessments of all properties
Use year 15 transactions to provide for recapitalization of LPs, address deferred capital projects and allow for cash distributions to parent

9. THANK YOU
My take away: Development is easy compared to asset management
Arlo M. Chase
Senior Vice President, Real Estate
& Development
Services for the UnderServed, Inc. T: E: W: