Love Your Company’s Affordable Housing Portfolio? So Buy It.

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6 min read

MVAH Partners build new development company 

Brian McGeady and Michael Riechman share a dedication to affordable housing, a dedication that is reflected in the origin story of their new company, MVAH Partners.

The story begins at the Miller-Valentine Group, a multi-focused construction, development and real estate management company headquartered in Dayton, OH. “Mike and I were both on the Miller-Valentine executive committee,” McGeady explains. “The company does a lot of different things, including office, industrial, residential, mixed-use and senior living, among others, and we were in the midst of the strategic planning process for the future of the organization. We realized there was no real synergy between the affordable housing component and other segments of the business. Mike and I had a passion for affordable housing, and we thought that separating it out on its own would offer a better focus for both organizations.”

Under McGeavy’s stewardship, in 2016, Miller-Valentine was named the third largest affordable housing developer in the country for new units created. In 2004 through 2005, he was with Paramount Financial Group, underwriting tax credit properties; involved in more than $150 million of equity investment.

It took about a year for the concept to mature. Valuation of the properties is covered by a confidentiality agreement. But the two found a financial organization with deep experience in various types of tax credits, that was interested in participating in affordable housing with a portfolio and leadership team already in place. McGeady and Riechman were then able to arrange an asset purchase from Miller-Valentine of 91 properties, comprising about 5,500 units, serving about 7,500 residents.

“That organization is the investor member and Mike and I are the managing members,” McGeady says. “It was a natural fit.”

An Avalanche of Approvals
The portfolio transfer involved approvals from lenders, investors, syndicators, state agencies and local governments. “There had to be north of 50 or 60 organizations whose consent we needed,” McGeady recalls. “Getting those 91 properties transitioned required over 600 documents. Informally, we let people know of our plans toward the end of 2017. We actually started the process March 1, 2018 and closed on September 28.”

Based in West Chester, OH, about midway between Cleveland, Columbus and Pittsburgh, MVAH will concentrate on nine percent Low Income Housing Credit (LIHTC) transactions as its core business. There is also an office in Charlotte, NC. “Our overall goal is to grow a large affordable portfolio through new development using nine percent and four percent housing credits while also being able to acquire affordable properties and portfolios,” Riechman told Affordable Housing Finance.

About 50 management people came over to MVAH from the Miller-Valentine corporate side, and another 100 or so in the field attached to the various properties. “They had the passion we do going forward with this company. That, to me, was the most exciting part.” Support staff includes marketing, training, maintenance and accounting professionals, working with advanced technology, information and procurement systems. According to the website, the company stresses its dynamic relationship with investors based on aligning mutual goals to optimize their income and expense expectations. The website also lists a number of high-level jobs the company is looking to fill.

Long-term Partners     
The partners have a long history together, longer than they realized when McGeady came to Miller-Valentine in 1998 and worked under Riechman. It turned out they both attended Alter High School in Kettering, OH, five years apart. “I’ll leave it to others to figure out which of us is older,” McGeady offers. Riechman left Miller-Valentine to run the LIHTCs platform for RBC Capital Markets, with an annual investment volume of approximately $600 Million. He then became senior managing director and head of the affordable housing equity group at Centerline Capital Group, where his responsibilities included syndications and portfolio dispositions, before returning to Miller-Valentine in 2014.

In the new company, McGeady will have responsibility for guiding construction and development activities and processes, and for the strategic planning, acquisitions, feasibility analysis and the creation of strategic housing partnerships with both nonprofit and for-profit organizations. Riechman will oversee portfolio management and investor relations. They will split office management tasks, with McGeady concentrating on human resources and Riechman focusing on accounting functions. Both partners stress, though, that they work closely together and are in frequent consultation on both the management and portfolio sides of the business.

Unlike Miller-Valentine, which has its own in-house construction component, MVAH will serve as construction manager, but will farm out actual construction to third-party general contractors. The partners are looking to hire builders with local connections who are familiar with the conditions and workforces in the areas in which they operate. This approach also will allow the company to be more flexible with resources in searching out and taking advantage of new business opportunities. With its existing portfolio, MVAH currently operates affordable and senior developments in 15 states throughout the Midwest and Southeast: Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee and West Virginia. “And we are exploring opportunities in Florida, New York and Wisconsin,” McGeady adds. He and Riechman have a stated goal of doubling the portfolio by 2023.

Among the most recent projects to open is the Riverside Senior Lofts and Cottages in Dayton, OH, a new, $11.5 million affordable housing community of 62 units for adults 55 and over, featuring one- and two-bedroom apartments and two-bedroom villas with attached garages.

The development, a partnership with the nonprofit, faith-based St. Mary’s Development Corporation includes modern, energy-efficient kitchens and laundry facilities, as well as a fitness center, media room, business center with computer workstations and a community room.

“We always want to do new development but focus on the portfolio is more of a driver than it was at Miller-Valentine,” McGeady states. “We will probably launch an acquisition platform in 2019.”

The key characteristic of the new company is easily summarized by McGeady. “We are very mission-oriented: 100 percent focused on affordable housing. We are here to give our residents as much peace of mind as possible – through safety, security and a comfortable living environment. The true driver of who we are and what we want to accomplish is to make their lives better.

“I can’t tell you how invigorated I get every time I go to a grand opening. I’m always telling my staff, ‘You have to go out there and meet the people, see firsthand how they live. It gives you a whole new perspective.’”

MVAHPartners.com has an online resident services feature through which, among other things, residents can enter maintenance requests. Preventative maintenance is considered one of the keys to maximizing the value of the portfolio.

Though the two companies are distinct, they will work together on joint ventures. “We have an outstanding relationship with Miller-Valentine going forward,” McGeady says. “Leaving was bittersweet, but we couldn’t be happier. It was the best course for both companies. To go through a process as cumbersome as this and still have a great relationship, I think says a lot about both organizations.”

For his part, McGeady couldn’t be happier. “I’m smiling every day now. I’m skipping to work. We care about what we do and, hopefully, we can have some fun.”

Story Contacts:
Brian McGeady, [email protected]
Michael Riechman, [email protected]