Sales and Transfers

Given the age of many of the projects and their owners, there are many reasons why they are sold or transferred. However, unlike traditional commercial multi-family properties, these can be more difficult as it is harder to put a commercial value on limited disbursement projects or properties subject to Restrictive-Use Covenants (RUC's). The following are some common circumstances.

  • An aging limited partner wants to sell. An important consideration here is that current estate tax law allows for a step-up in the basis upon death as well as re-calculating the depreciation using Section 754. It is far better for the limited partner to hold on to the project and use the Special Allocation Strategy to reduce the ongoing phantom income

  • A fee-based manager wants to purchase the GP interest. They understand that the GP controls the management of the project and by purchasing the GP interest, they are more secure in their management contract and can receive the full amount of the management fees. The GP Brokerage Service can help speed things along.

  • A manager or developer has a project or projects in an area or State that is not conducive to their business. This happens a lot when people expand or purchase a block of projects and then later find that some are not feasible to operate. These projects can be sold to another company that has business in that area. We have contacts in most of the States and our GP Brokerage Service can assist them.

  • The owner of a management company or development company wants to retire and liquidate their GP interests. In many cases, they may want to transfer them to a younger family member and in others they may want to sell them outright. Our Project Analysis Service can be used to make sure they are getting a fair value or setting an appropriate target price.

  • A Syndicator wants to close out a tax credit fund by selling their LP Interests. Once a tax credit project has met the required holding period, the Syndicator may want to sell it. However, the value of the interest is depended on whether the lower-tier GP is interested in re-syndicating or whether an investor is interested in acquiring them for the passive loss deductions such as in our LP Purchase Strategy.

  • A limited partner wants to sell a project that has a small negative capital account or a positive capital account. This situation presents a number of opportunities: they could sell the project to an investor looking for passive-losses (LP Purchase Strategy); they could receive funds from a transfer to a new syndication; they could sell it to the GP; or they could gift it to a charity (Bargain Sale Strategy). The Project Analysis Service can outline the pros and cons of each of these as well as help determine the most financially advantageous approach.

These are just a few examples of why project ownership may be sold or transferred. Housing & Tax Consultants, LLC has developed many strategies to assist Owners, Developers and Managers in the secondary marketplace.