Case Study

Brandywine Apartments in Richardson, TX

5 min read

Enabling Texas Seniors to Stay Home for Life

National Church Residences and FTK Construction Services are working on their second project together in Texas and have agreed to do a third. The two companies seem to have some items of philosophy in common that make for a productive partnership. Interviewed separately, they both say the same thing about the seniors living in the Low Income Housing Tax Credit (LIHTC) development they are renovating in Richardson, a suburb of Dallas: They want the residents to be able to enjoy upgraded features and stay in their homes for life.

The money raised for the project, $6.6 million in LIHTC equity and a $2.8 million construction-to-permanent loan from Capital One allowed National Church Residences “to add a part-time service coordinator, a really critical service piece to allow residents to stay home for life,” says Tracey Fine, director of Housing Development for National Church Residences. Additionally, Jim Goodman, chief executive officer at FTK, says, “We realize residents are invested in long-term residency here as their final homes. They have pride of ownership.”

Fine says the organization acquired the 40-year-old, 50-unit property in 2019 and is anticipating a 12-month construction period. The architect for this project is Alliance Architectural. National Church Residences specializes in senior residences, she explains, with smaller amounts of family communities and supportive housing for the homeless. The senior residents at Brandywine Apartments are low-income and all of them have project-based rental subsidies.

“Texas is one of our target growth states,” she says. “We have 31 properties and it really fit our portfolio, both for location and it being senior/subsidized. We have had a lot of success renovating pre-existing senior properties here in Texas and saw this as an opportunity to preserve this property.”

She notes Brandywine Apartments “was originally built in 1980. At 40 years old, it is definitely ready for repair.”

Though supply-chain challenges due to COVID-19 have come up, Goodman says FTK mitigated this because it, “chooses to do the purchasing and manage the logistics of all materials in LIHTC deals. This is not typical of our peer group, as material purchases are generally handled by subcontractors. Our high focus on consistency and control gives us an incredible buying position and, in the pandemic, sometimes made us a preferred customer.”

Mark Frazier, chief operating officer at FTK, which has been in business since 2001, says the firm has a philosophy of “adapt and overcome” when it comes to things like supply shortages and labor challenges. FTK makes a point of hiring ex-military personnel to help them achieve this, “our ex-military staff understand the mission, and they get it done,” he says.

An Appetite for Improvement
Goodman explains the other philosophies in play at the construction company. “We have an insatiable appetite for improvement” and it encourages their clients to “engage the right team, at the right time, with the right technology. Following this formula gives the project the highest probability for success.” 

FTK has invested heavily and is quite proud of the technology that produces a high level of efficiency from preconstruction to project close-out at properties, like Brandywine Apartments.

Goodman states that while FTK has completed projects in 33 states to date across the country, Brandywine is just a 15-minute drive from the home office. “This one happened to be in our backyard,” he adds. “The affordable housing stars aligned for us.”

In looking for a partner on projects, “FTK searches out relationships with experienced developers that have multiple operations across the country,” Goodman says. “NCR fit the bill. They are a great company.”

With over $100 million in projects-in-process and a bonding capacity of a half-billion dollars, FTK targets projects from $2 to $25 million.  

Frazier states that exterior renovations at Brandywine Apartments will include, “new roofs, paint and electrical upgrades. The interior renovations will update kitchens with new appliances, cabinets and countertops; add central air conditioning; new flooring; new interior doors and windows; fixture upgrades; and new plumbing. We’re really excited for the residents!”

Additional upgrades include parking lot pavement and sidewalk repairs, new lighting, new perimeter fencing and energy efficient enhancements. Additionally, the community building will be renovated to include a new kitchen and a renovated leasing and management office.

Starting Early Really Helps
Commenting on its partnership with National Church Residences, FTK says it first started talking with the organization about rehabbing this community on January 1 of this year and went to contract in May, which was a very quick turnaround. In many cases, the lead time from that first conversation about an upcoming project to being awarded the contract could take a year.

It also indicated that at Brandywine, it needed to renovate and customize the apartment units to National Church Residence’s national standards rather than its normal LIHTC unit package, which took a little more work but turned out well.

According to Fine, “National Church Residences closes approximately eight to ten LIHTC deals a year, a mix between new construction and rehabs. Our portfolio includes approximately 340 properties in 25 states (270 owned and 70 managed).”

She says the rehabs at Brandywine will be done with a minimum of disruption to current tenants during a four-week rehab time frame for each of the units.

“As natural vacancies occurred in the months before closing, we did not lease them. We made them ‘swing’ units. We try to get six or seven swing units and move tenants in and back and repeat.”

She describes Richardson as, “An excellent area. It’s a higher income suburb of Dallas, with a shortage of affordable housing.” There is some commercial and retail nearby, and the higher incomes made it a risk to convert to a market-rate property.

The first collaboration between National Church Residences and FTK was the renovation of Mid-Tule Village in Tulia, TX, and the next one coming up is Lennox House in Grand Prairie, TX.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.