Photo: Daniel PortnoyKen H. Thomas created a bond fund meant to help banks make more money available for workforce housing loans.
Bonding over affordable housing in Miami-Dade
Workforce housing, says Ken H. Thomas, a bank analyst and longtime Miami resident, is often incorrectly perceived as a social issue. “It’s an economic issue,” he says. “If workers can’t find affordable housing, what are we going to do? Have them commute two hours to work every day in traffic?”
In south Florida, among the country’s least affordable housing markets, part of the housing problem is too few affordable homes near employment centers. But another element is the inability of working-class people to get mortgages to buy the homes that do exist.
Since the financial crisis, government regulations designed to ensure banks’ financial stability and prevent large-scale mortgage defaults have made mortgage lending more expensive and timeconsuming, making banks reluctant to lend to potential home buyers. Regulators also have required banks to have more money in reserve to offset potential defaults. BankUnited, the largest Miami-Dade-based bank, left the retail mortgage business in 2016.
Last spring, Thomas founded a bond fund called the Community Development Fund, which puts together portfolios of mortgage loans it buys from banks. The fund is meant to stimulate mortgage lending by banks to people earning about $40,000 or less by taking those loans — and the associated risk — off the banks’ books. In a recent transaction, for example, it bought about $1 million in loans on homes that sold for $140,000 to $180,000 each.
The fund’s investors must be federally insured banks that contribute a minimum of $1 million each. Seven Florida banks helped provide the $25 million in initial funding for the Community Development Fund. When banks buy shares in the fund, the fund earmarks the investment specifically to buy loan packages in the investing bank’s community.
Banks have two incentives: Participation helps them fulfill benchmarks set by the 1977 Community Reinvestment Act, which mandates that they lend money in lowand moderate-income areas in their communities. Banks that don’t meet CRA criteria face more scrutiny from regulators and can have trouble expanding, for example.
The banks also earn a financial return on the money they invest in the fund. In its first five months, the fund, which trades on Nasdaq as CDCDX, produced an annualized return of about 4%.
Thomas hopes the fund will grow to $50 million in its first year and up to $500 million in five years, given strong demand for workforce housing in Florida and the nation.
— Doreen Hemlock
HIALEAH — Aerospace products distributor KLX Aerospace Solutions will expand its Miami-Dade operations and create a global headquarters and distribution center in the county.
MIAMI — Bridge lender BridgeInvest announced the closing of its first private equity fund with $47 million; the fund will invest in short-term, first-mortgage loans on commercial and residential real estate in the Southeast. Medina Capital and private equity firm BC Partners are forming a Miami-based multinational data center and cybersecurity company, with Medina Capital CEO Manny Medina as CEO.
The joint venture will acquire 57 data centers from CenturyLink and four firms in which Medina Capital has stakes. Co-working company LAB Miami has formed expand with LAB Ventures, which will work with founders to test and build promising business ideas and incubate tech startups. It will also launch LAB ID, which will aim to encourage greater collaboration between startups and established businesses. The expansion is funded by $1.1 million from the John S. and James L. Knight Foundation. Opko Health will expand from pharmaceuticals and diagnostics for humans into animal health products. Car company Aston Martin will brand its first residential tower, the Aston Martin residences in downtown Miami, in a partnership with G and G Business Developments. Aston Martin will design the interior of the building. East End Capital purchased the New World Tower office building for $84 million from New York-based Witkoff, Panther Capital Management and Highgate. East End will spend more than $10 million renovating the 30-story tower. Florida East Coast Realty has signed a Hyatt Centric hotel to occupy 17 floors at Panorama Tower, a 61-story structure expected to open in 2017.
MIAMI-DADE — PortMiami will expand a terminal to handle more than 5,000 cruise passengers at a time, add three Super-Post- Panamax shipping cranes, upgrade its terminal yards and develop an inland intermodal facility.
NORTH MIAMI — Shopping center real estate investment fund Equity One is merging with Jacksonvillebased Regency Shopping Centers to create one of the largest shopping center REITs in the U.S. Florida International University will create the Ratcliffe Arts + Design Incubator on its North Miami campus. The incubator will help students in FIU’s College of Communications, Architecture and the Arts create businesses.
OPA-LOCKA — The Miami- Dade County Commission approved a deal for developers Foundry Commercial and Clarion Partners to build a 1.75-million-sq.- ft. Business and industrial park at Opa Locka Executive Airport.
After a patient died in the wake of an undetected fever, Dr. Marc Abreu was determined to find a better way to measure body temperature. After years of research at Yale University, Abreu found that by placing a sensor on the thin skin by the eyes and nose, he could continuously and noninvasively monitor internal temperature from what he calls the “brain temperature tunnel.” Doing so can also reveal patterns that may be used to diagnose and treat diseases.
This spring, Abreu opened Brain Tunnelgenix Technologies in Aventura to develop products and services from his findings. He has six employees in south Florida, working with eight more in Connecticut and Brazil. The company’s first commercial product will be used to monitor and treat people with sleep disorders.
» The Greater Miami Chamber of Commerce hired Alfred Sanchez as CEO. Sanchez, who had been CEO of the American Red Cross South Florida, replaces Barry Johnson, who is retiring.
» Berkowitz Pollack Brant Advisors promoted Joseph Saka to CEO, from co-CEO and director-in-charge of tax services. He replaces founder Richard Berkowitz, who remains executive chairman.