Does anyone have any knowledge into the structure of Related companies affordable acquisitions roles? Believe its unlike their other roles where acquisitions and development are lumped together but rather a more pure acquisitions role of just affordable housing.
Any information or details on the group/structure/culture/comp for an associate role would be greatly appreciated!
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Worked with them a lot previously and know folks there. Their affordable acquisitions team ONLY does LIHTC deals. They’ll use tax credit equity to either buy/recapitalize then rehab Class C Section 8 properties. They’ll leverage their connections to get the govt to agree to increase the Section 8 rents. For the rehab, it’s typically cosmetic (new paint, flooring, etc). Their strategy is effective and profitable but I did not find it interesting at all. Their affordable team operates as an independent team outside of the others. The affordable group’s properties aren’t even on the Related Companies balance sheet.
Their fund management team is far more interesting IMO. They do debt/equity and mainly do multifamily.
No idea on comp but from convos I have had with their folks, I’d say to temper your expectations on comp. It’s not a lucrative role at the analyst/associate level.
Just to clarify this statement for people reading along, there is no "leveraging connections" going on. Related, like any other Section 8 landlord, is contractually entitled to regular increases to their rent roll.
And having worked with many of these properties, occasionally ones we've bought from Related, they generally do a fair sight more than "cosmetic" repairs. They do those as well, but most of their assets are in very good shape.
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Look, I'm biased because I'm in affordable. So take the following with several grains of salt.
I think it's a great place to work if you're interested in multifamily in general. Arguably the best, since you get good experience/skills and you get the "brand name" element which is pretty rare in affordable housing. Not a lot of affordable housing developers are "household" names to the real estate market at large, and Related certainly is. The skills you gain are broadly applicable; quite frankly, affordable housing in general is far more complex than market rate MF. I know and have known a lot of people to come out of Related's affordable group - they have a huge alumni tree, and lot of them have gone on to build their own firms. Most of them, though, have stayed in the affordable space. A lot of that is natural - if that is what you know, you're more likely to stay in that space. Some of it is confirmation bias, since I'm more likely to run across the people who stayed in the LIHTC/Section 8 world than someone who moved to Florida to build condo buildings. Some of it (and you'll excuse me for this) is because it's a way better asset class than boring-ass acq/rehabs in the Southwest!
Hopefully that is helpful.
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Ozymandia can you provide insight on fee income from renovation like this (as opposed to LIHTC ground up development). How do fees compare for the operator and how much equity does an operator need to invest, if any?
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