Program of Respect Pinnacle continues to take on bigger challenges than turning market-rate apartments. The company has entered into management of subsidized affordable housing. “Like everything else, tax credits are a huge opportunity for us because they represent a very stable long-term business,” says Harrelson.
So, while other companies shy away from the compliance issues and other headaches that come with tax-credit properties, Pinnacle embraces the challenge. The company has a separate compliance department, and its investment managers are trained in how the program works, explains Evelyn J. Danowitz, vice president, asset management at Simpson Housing Solutions L.L.C., a client of Pinnacle’s. “[Pinnacle] understands the risk,” she says.
One of the main reasons Simpson Housing works with Pinnacle is because Pinnacle understands that different clients have different needs. “[The company] doesn’t try to fit us in the same box as everyone else,” says Danowitz. Plus, it has a strong knowledge base of how the program works.
The company began working on affordable housing deals in 1994, transforming troubled public housing properties into attractive communities. Pinnacle currently has more than 27,000 units of affordable housing under management, which consists of privatized public housing, bond financed communities and Section 42 Low-Income Housing Tax Credit units.
But Simpson Housing also likes working with Pinnacle because of the consistency it provides, says Danowitz; Simpson Housing’s operating statements all show up at the same time, accurate and in a standard, easy-to-use format. And, whether in Pennsylvania or Texas, any new Simpson Housing property can use Pinnacle’s management services, she explains. “There are not many national players that are focused on fee business. Most of the national players are REITs [real estate investment trusts]. Some of them do third-party [management], but it’s not their main concern,” she adds. “I want to be [Pinnacle’s] main concern, frankly, and that’s what I’m getting.”