NJ Apartment Summit Run-Down: Catching Up with Michael Staton, Community Preservation Corporation
by Josh Anderson
NEWARK, NJ — Michael K. Staton, with over 30-years of experience in affordable housing, is the Vice President of Community Lending at Community Preservation Corporation (CPC) and is responsible for identifying borrower needs, establishing lending relationships, analyzing financial data, and determining the merits of specific loan request and recommended structures. Michael has extensive experience in financing multifamily housing development transactions using a variety of products and structures, including: conventional construction and permanent financing; tax-exempt bond executions; bridge loans; Freddie Mac lending platforms; and federal and state tax credit programs. Staton was a featured speaker at yesterday’s New Jersey Apartment Summit, where we caught up with him about the local industry and the most salient trends he is tracking.
CapRE: What projects or initiatives are you most focused on right now? Is there anything you’d like to highlight for our readers?
Staton: On November 21st, 2018, the New Jersey Housing and Mortgage Finance Agency awarded Low Income Housing Tax Credits (LIHTC) to 22 multifamily rental projects in the State of New Jersey. The total development costs of all 22 properties is estimated to be $478,951,425 and will result in 1,411 units of workforce housing. I am working on providing the permanent debt on several of those awards.
In addition, I am working on the acquisition and preservation of several small buildings/properties between 5-30 units Since CPC’s inception in 1974, over 70% of CPC’s loans have been to small buildings and CPC continues to focus on cultivating strategies to support the creation of new capital products as well as collaborating with our governmental partners to develop programs and tools to address the urgent preservation needs of the small multifamily building stock and its owners.
CapRE: How would you characterize the New Jersey multi-family arena over the past 6-12 months? Where might it go in the next year?
Staton: The New Jersey Department of Treasury recently approved 129 Census tracts for inclusion in the New Opportunity Zone program which will provide tax incentives for private capital investments in “distressed areas” which should help communities become less distressed over time. In addition, affordable, workforce housing continues to be a challenge in New Jersey and I am hoping that the governor will push for greater public/private partnerships to address the state’s shortage of affordable, workforce housing.
CapRE: What are you most excited about right now as it relates to NJ multi-family? Are there any economic or demographic trends, or perhaps even legislation or technological advancements, you’re tracking?
Staton: CPC is very much interested in collaborating with New Jersey’s local and state housing agencies in developing programs and tools to address the urgent preservation needs of the small multifamily housing stock. As a mission-driven company, and the largest Community Development Financial Institution (CDFI) in the country for multifamily rental housing, CPC plays a unique role bridging the public sector and private capital. CPC has already built strong and productive relationships with key housing finance agencies/entities in New York, including NYC Housing Preservation & Development, NYC Housing Development Corporation, and NYS Homes and Community Renewal, and we are looking forward to creating the same synergy in New Jersey.
CapRE: What sub-markets in New Jersey are the most active and which are the most challenged?
Staton: Downtown Newark appears to be bustling with a lot of revitalization efforts underway. Of course, Jersey City and Hoboken are hot markets. Harrison, which is right next to Newark, has a lot of construction going on. The City of Plainfield is currently undergoing quite a bit of redevelopment efforts and have actually been inviting brokers, lenders and developers into the city to encourage development and has reportedly invested half a billion dollars in 1500 new residential units and nearly 300,000 square feet of new retail space.
CapRE: What is the biggest challenge facing the multi-family industry at the moment?
Staton: Potential rising interest rates and construction costs
CapRE: What does the future of affordable housing look like in New Jersey? How do you anticipate a potential slowdown might impact that sector?
Staton: Affordable, workforce housing will always be in demand. My son and daughter recently graduated from college and both are working and have their own apartments and I know firsthand how expensive it is for them to live on their own. With increased tariffs on steel, aluminum and lumber I believe we’re already seeing some reports in the news that this could very well contribute to a slowdown in the new construction of multifamily developments.
CapRE: It was great to hear from you at our New Jersey Apartment Summit, where you served on the panel “Overreach and Grabbing? Finding Capital for New Development at the End of the Cycle, Headwinds, Tailwinds & Other Challenges.” What was the most interesting thing you learned or heard about at the NJ apartment summit?
Staton: Almost everyone thought that there is currently no shortage concerning the availability of capital for multifamily rental developments in New Jersey, which is a good thing.
CapRE: How did your panel go? What were some of the most salient themes discussed?
Staton: The New Jersey Apartment Summit is always informative and allows professionals in our industry to interact and collaborate on finding solutions and sharing ideas. Due to New Jersey’s close proximity to New York’s workforce, capital investment in the state remains strong; however, acquisition costs, real estate taxes and the shortage of affordable housing remain challenging in New Jersey. Having said that, new markets that are undergoing redevelopment efforts like Harrison, Plainfield and Camden’s waterfront are encouraging signs of continued growth and investments in the state, particularly around transit hubs.
The forecast and projections for 2019 look good and I am excited about taking part in the continued growth and prosperity in the state.
CapRE: Thank you Michael. We’ll see you again at a CapRE New Jersey CRE Summit soon!
Prior to joining CPC, Michael was Vice President of Commercial Real Estate Financing at TD Bank where his primary responsibilities were financing multifamily housing developments, office buildings, retail centers and industrial space. As Vice President of Originations at WNC & Associates, his primary responsibility was to manage relationships with clients and invest in Low Income Housing Tax Credit properties, as a Limited Partner, to create and preserve multifamily, affordable housing and to maximize the rate of return to Investors for property acquisitions. Michael also spent over 20 years at the New Jersey Housing and Mortgage Finance Agency where he served in several key roles, including Director of Multifamily Programs and Lending, Director of Credit, Assistant Director of Financial Management along with other essential positions. Michael holds a Bachelor’s Degree in Finance from Hampton University and a Master’s Degree from Rider University.