State of LIHTC Syndication Market
I’m considering taking a acquisitions job at a lihtc syndicator with good volume. There seems to be a lot of tailwinds. Can anyone speak to the state of the market and pros/cons of the position
Specific answer depends on which syndicator. However, the LIHTC market as a whole is super hot right now. It's one of the few areas which has strong bipartisan support on capitol hill, and some of the reforms being discussed should energize more construction/rehabilitation work in the near future. Given how fast rents are rising nationally, seems like there going to be broad based need for the product.
I'm only really familiar with NY/NYC, but from colleagues in other markets it sounds like more and more states are running up against their volume cap allocation, so obviously there is more construction going on - or at least an increased need for credits. Which means an increased need for syndicators, one would think. Also depends on who the company is actually syndicating to. With more ESG investing, there might be a broader market for credit buyers, which in my experience has mostly been financial institutions. If investors without CRA requirements start jumping into the space for mission-related reasons, that can't help but help. So might be cool to be at a syndicator aimed at UHNW individuals, or pension funds, or whatever
I can't really speak to the position, but I have two affordable projects going right now and I can tell you financial analysis is not easy. From what I understand, working in LIHTC definitely gives you the skills to lateral out should you want to (if anyone thinks otherwise please correct me).
As far as the market is going, Ozy is spot on, there has been increasing concern about hitting state caps and more competition for building affordable deals. I've had GCs submit bids and not max out their cap on OH/P because they want the job, never seen that before in an affordable project.
Yeah. It's worth mentioning that the capital stack in affordable housing is generally a lot more complex than in straight debt/equity plays, so if you can model that stuff all together you absolutely will be set up to do it in any other area as well.
Is the position in the southeast US?
Elsewhere but think I might have priced myself out the position
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