Rental redeveloper finds success in areas 'that need a little push'

At 1221 Mount Vernon St., How? Properties is turning a former coal shed into 40 apartments. Harman Deutsche

Conshohocken-based How? Properties redevelops rental projects all over Philadelphia, with more than $100 million in real estate under development or management.

By 2015's end, it expects to own and manage about 500 apartments. It also presents classes for tenants on how to build wealth by investing in real estate.

How? Properties principals Andy Blum, Gary Jonas, Bill McLaughlin, and Gary Risler formed a mortgage company in 1998, then expanded into real estate in 2003. They went on to conceive their own construction and development projects and now manage the completed ventures.

Three years ago, How? began offering partnerships to accredited investors looking for a minimum of a 10 percent annual return. The new capital allowed larger projects to be undertaken. Over the last three years, Jonas et al have developed 10- to 40-unit buildings in emerging-neighborhood markets.

Said Jonas: "Our investments have been strategically selected around revitalizing neighborhoods in high-traffic areas," such as Spring Garden and the Ridge Avenue corridor. "We go to areas that need a little push.

"All of our projects are managed in-house from beginning to end, including property acquisition, construction, and management," Jonas said during a recent tour of How? Properties' efforts at 1221 Mount Vernon St., a coal shed-turned-auto repair shop bought for $1.4 million.

Among the company's recently completed projects are 3939 Lancaster Ave., 11 apartments and one commercial space, and 3862 Lancaster Ave., an apartment building with 22 units. At 3221 Spring Garden St., it completed a 24-unit apartment building, and it has finished 22 rental units at 4029-31 Spruce St.

At 3638 Stanton St., it converted buildings once belonging to St. Bridget's Parish into multifamily housing.

The firm is renovating Wyndmoor Gardens in Chestnut Hill, a 100-unit building plagued by crime and rodent issues. "The message we are sending is there are responsible developers," Jonas said.

Forthcoming projects include 1221 Mount Vernon St., on which How? Properties is working with architects Harman Deutsche - a 47,000-square-foot building being converted into 40 apartments.

At 549 Wister St. in Northwest Philadelphia, How? is building an 85,000-square-foot complex that will house 49 apartments, its biggest project yet, due to be completed in August. At 4619 Woodland Ave., in the Squirrel Hill section, it expects to complete 16 apartments by August, as well.

On land at 1608-12 Ridge Ave. given by the city to the Francisville Neighborhood Development Corp., the company is developing an apartment building with first-floor commercial space to be leased at $6 to $8 a square foot, vs. a market rate of about $15 a square foot.

"We hope it will really kick-start this corridor," Jonas said.

How? Properties also wants to offer an assist to potential newcomers in the business, including tenants at its buildings.

Jonas said any tenant, or anyone interested in real estate, can attend free Tuesday and Friday evening seminars and workshops at its offices to learn about how he and his team redeveloped once-blighted locales. "We have 1,200 tenants we can show how to create value and build wealth in real estate," he said.

Already, the company hosts a Shark Tank-style entrepreneurship-education program at Morton McMichael School in Mantua. In the 18-week course, eighth graders learn to identify a business needed in their neighborhood. In three weeks, they write a business plan, and 10 groups compete until two winners are chosen.

In Francisville, How? is working on a property at Broad Street and Fairmount Avenue with the local community-development corporation, which will own 51 percent of the completed project. "We want to show them how to build it next time - without us," Jonas said.

On all How? Properties' projects, "we bring partners in on each deal," he said. "They own 50 percent, and we own 50 percent. Our 2016 goal is for property management to help move us from break-even to profitability" as the number of units is scaled higher.

Source: Philly.com