Industry Trends

Partners Capital Finance Inc. DBA Archway Fund and the principals of alternative investment manager Oakhurst Advisors have successfully completed a recapitalization of the Los Angeles-based direct portfolio bridge lender, which will now originate short-term commercial real estate debt under the new name Archway Capital.

The National Multifamily Housing Council (NMHC) found a 12-percentage point decrease in the share of apartment households that paid rent through April 5, in the first review of the effect of the COVID-19 outbreak on rent payments. The Tracker found 69 percent of households had paid their rent by April 5; this compares to 81 percent that had paid by March 5, 2020, and 82 percent that had paid by the same time last year.

Featured Content Includes Analysis on Affordable Housing, a Targeted Look at the Dallas Market, Q&A with an NYC Multifamily Investor, and Economic Trends Impacting the Multifamily Sector Overall

NMHC’s Quarterly Survey finds municipalities threatening to or imposing rent control are losing interest from multifamily firms 

American Landmark, one of the fastest-growing multifamily owner-operators in the country, is launching a new resident-centered customer service program at each of its 81 communities throughout the Southeast.  “Landmark 360” offers residents the following time- and money-saving guarantees:

Michael Shadeed, Director for Franklin Street Insurance Services, is nationally recognized expert in risk management, service, brokerage placement, and program administration for the commercial real estate industry.  He recently answered some frequently asked questions on how specialized insurance services can reduce the inherent risks associated with the affordable housing sector.

1. Are there any unique risks or complex insurance coverage needs that real estate owners, developers, investors and managers should be aware of concerning affordable housing? 

Yes, these risks involve Low-Income Housing Tax Credits (LIHTC) first party insurance or tax credit recapture coverage.  It provides indemnification for tax credits that are wholly or partially unavailable at the end of the year.  Coverage for loss includes interest or penalties assessed by the Internal Revenue Service on recapture amounts.  Also, LIHTC Professional Liability Insurance is a stand-alone professional liability policy that responds to the ownership structure of LIHTC real estate developments and provides indemnity coverage for damages the limited partner(s) incurs as a result of an error or omission of a general partner.  A standard indemnity and defense policy will offer coverage for third party claims alleging negligence available to all insured partners. Damages could include loss of LIHTC, as well as interest or penalties assessed by the IRS on recapture amounts.

Michael Shadeed, Director for Franklin Street Insurance Services, is nationally recognized expert in risk management, service, brokerage placement, and program administration for the commercial real estate industry.  He recently answered some frequently asked questions on how specialized insurance services can reduce the inherent risks associated with the affordable housing sector.

1. Are there any unique risks or complex insurance coverage needs that real estate owners, developers, investors and managers should be aware of concerning affordable housing? 

Yes, these risks involve Low-Income Housing Tax Credits (LIHTC) first party insurance or tax credit recapture coverage.  It provides indemnification for tax credits that are wholly or partially unavailable at the end of the year.  Coverage for loss includes interest or penalties assessed by the Internal Revenue Service on recapture amounts.  Also, LIHTC Professional Liability Insurance is a stand-alone professional liability policy that responds to the ownership structure of LIHTC real estate developments and provides indemnity coverage for damages the limited partner(s) incurs as a result of an error or omission of a general partner.  A standard indemnity and defense policy will offer coverage for third party claims alleging negligence available to all insured partners. Damages could include loss of LIHTC, as well as interest or penalties assessed by the IRS on recapture amounts.

When it comes to managing commercial property risks, most insurance experts agree that risk management services should be uniquely tailored to each individual client.  The International Risk Management Institute defines the term as “The practice of identifying and analyzing loss exposures and taking steps to minimize the financial impact of the risks they impose.” The failure to implement a reliable asset protection strategy could cost you to pay out hundreds of thousands of dollars for bodily injuries and property damages.

Ryan Cassidy and Evan Seacat of Franklin Street Insurance Services share three vital items multifamily property owners and managers should consider when developing loss control prevention strategies.

1. Maintain Accurate Records

Having a proper records management system is critically important and will greatly facilitate your commercial property damage claims. As an owner, you should provide the insurance carrier with a basic property summary, which includes updated details on asset improvements, claims narratives, and a loss history report.

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