Home Leasing selling housing portfolio, including apartments in MD

Listen to this article

Rochester, New York-based Home Leasing, which for 23 years has been dedicated to creating affordable housing communities, is selling its real estate portfolio and will soon be dissolved.

Contour Housing Partners is under contract to buy 33 properties — the bulk of the portfolio — and will create a Rochester office to oversee operations and continue the affordable housing development mission.

The portfolio includes 252 units at Glenwood Gardens in Essex.

Founded in 2003 by the late Nelson Leenhouts, Home Leasing is a third-generation, family owned, for-profit company that has developed, built and managed a variety of affordable housing communities for families, seniors and individuals.

The firm took to heart the mission of creating homes, becoming the first company in the affordable housing realm to earn status as a Certified B-Corp. That designation recognizes a commitment to social, environmental and governance standards.

“You’re not just renting apartments, you’re building the foundation for someone to improve their life,” said Megan Houppert, Home Leasing’s CEO.

The Home Leasing portfolio includes new-builds, such as The Gardens at Penfield Square and Farmington on the Creek, and adaptive reuse conversions such as Tailor Square in the Hickey Freeman factory and Eastman Gardens in the former Eastman Dental Dispensary.

The decision to sell assets and eventually shutter operations has been in the works for approximately 18 months. Negotiations intensified once Home Leasing’s management team identified Contour Housing Partners and its parent company, Philadelphia-based Pennrose, as the best successor.

Houppert said the financial commitments required to create affordable housing have become greater and the resources necessary to maintain a large portfolio continue to evolve.

“As the industry changes, the business of affordable housing continues to get harder,” Houppert said on Friday morning. “As you grow, the need for more robust infrastructure grows. We got to a place where we had to ask ‘Is Home Leasing as it is now the best organization to continue the stewardship of these assets?’ ”

The answer for Houppert, her mother, Chair of the Board Catherine Leenhouts Sperrick, and her sister, Chief Operating Officer Sarah Struzzi, was that another firm should take over the portfolio. Houppert and Struzzi are the granddaughters of Nelson Leenhouts.

They believe they have found the right partner.

“Our organizations are aligned missionally,” Houppert said. “The heart of Home Leasing will live on with Pennrose.”

Contour Housing Partners is an independently operated subsidiary of Pennrose, a national multifamily housing provider. Contour Housing focuses on the acquisition, stabilization and preservation of rental communities.

“Our approach is grounded in Contour’s core values — integrity, collaboration, accountability and innovation — and a shared commitment to quality housing, strong communities and the dedicated professionals who serve them,” the company said in a prepared statement to the Rochester Business Journal.

Truman Tolefree, chair of the board of directors for the County of Monroe Industrial Development Agency (COMIDA), said the transition to Contour/Pennrose will very likely be seamless.

“In terms of national scale and technical expertise, I don’t know if they really get much larger than Pennrose,” Tolefree said at Tuesday, when the COMIDA board granted a transfer of two PILOT agreements on apartment communities from Home Leasing to Contour/Pennrose.

“Pennrose is a huge player in the affordable housing space,” Tolefree said. “I don’t think we’re trading down in expertise. I won’t say we’re trading up, because I have a lot of respect for Home (Leasing), but just in terms of managing properties, I don’t think it gets much better.”

That doesn’t mean the decision was easy for members of the Leenhouts family, however.

“In his wisdom as he aged — as a business owner and a business leader — Nelson knew that part of being a leader is championing your end,” Houppert said. “As we facilitate our wind-down, we get to control our end.

“I tell my kids two things can happen at the same time. You can be sad and happy at the same time. During this process there have been periods where it felt a lot like grief but honestly, I feel really good.”

When Houppert’s employment at Home Leasing began 16 years ago, they were working on their third affordable housing project and the firm had only eight employees. Today there are 126 employees, and the majority will transfer to Contour/Pennrose, she said. That includes Houppert, who will assume a role in project development.

Home Leasing’s construction division has already become part of Haynes Construction.

“Nelson’s legacy has always been about people,” Houppert said. “He cared about humans. It’s sad to wind-down something you spent a lifetime working on, but it also gives me a great deal of peace.

“I have just an unbelievable workforce. We’ve built a business alongside each other.”

Home Leasing recently relocated to East Avenue from its original home in Clinton Square, a building built by Nelson Leenhouts’ brother Norman. Foreclosure proceedings on Clinton Square were finalized in July but the mortgagee, Clinton Asset Holding Associates, L.P., was not affiliated with Home Leasing.

While closing on the affordable housing properties will take time, Home Leasing has notified residents at several communities that Contour/Pennrose will be taking over management in New York, Pennsylvania and Maryland.

“The transaction is subject to customary closing conditions and regulatory approvals,” Contour’s statement said. “Until the transaction closes, both organizations will continue to operate independently, and there are no changes to day-to-day operations, contracts, or resident services.”

It’s not entirely clear what will happen with projects that were in the Home Leasing development pipeline. The firm is no longer sponsoring projects but is working with partners in those developments to find another firm to assume the Home Leasing role.

[email protected]/(585) 653-4020