FOR IMMEDIATE RELEASE
Contact:
Jessica Spaulding or Heather Cho
949-863-1910 ext 22, 30

CT/KDF COMMUNITY DEVELOPMENT PARTNERS, LLC AWARDED $90 MILLION IN
NEW MARKET TAX CREDITS BY U.S. TREASURY DEPT. FOR INVESTMENT IN
LOW INCOME SOUTHERN CALIFORNIA COMMUNITIES

1. CT/KDF Plans To Provide Equity to Developers of Infill Mixed-Use Developments with the Intent of Creating Affordable Housing
2. Federal Tax Credit Program Designed to Spur Private Investment in Low Income and Distressed Communities

NEWPORT BEACH, Calif., September 13, 2006 – CT/KDF Community Development Partners received a $90 million allocation from the U.S. Treasury Department’s New Markets Tax Credits (NMTC) Program, which is aimed at attracting private-sector investment for projects in underserved distressed communities. CT/KDF Community Development Partners, a new investment entity formed by CT Realty Corp. and KDF Communities, will principally use the funds to provide equity at significant discounts compared to market rate pricing for the creation of infill mixed-use communities that combine housing with retail and office preferably located near transit-oriented sites in distressed areas of Southern California.

“Because Southern California remains the nation’s least affordable area, it is becoming increasingly difficult for hardworking families and residents to find affordable housing options.  By offering inexpensive equity, we can lower the developer’s risk thus encouraging the development of affordable for-sale housing in low income communities that are closer to where people work or near public transportation. We can also employ the same strategy to subsidize retail lease rates for merchants if such space is available in the project to help ensure their success,” said Bob Campbell, managing member, CT/KDF Community Development Partners.

The national NMTC program is based on the idea that there are viable business opportunities in low income communities and that a federal tax credit provides an attractive incentive to increase the flow of investment capital to such areas in order to stimulate economic growth and create jobs.
Under the program, CT/KDF Community Development Partners receives a credit against federal income taxes for making qualified equity investments. The credit provided totals 39 percent of the cost of the investment and is claimed over a seven-year period. All of the investment must in turn be used for financing projects in designated or distressed and lower income areas.

 “Ideally, we will finance projects that are large enough to serve as catalysts for more redevelopment in the surrounding area. This will multiply the investment potential, encourage greater job creation and provide more economic opportunity for cities and residents,” said Paul Fruchbom, managing member, CT/KDF Community Development Partners.  Fruchbom notes that the team’s business strategy is to primarily provide equity since equity and mezzanine debt are the highest risk components of a project’s financial structure. That is why equity is virtually non-existent or expensive if available at all for projects in distressed and lower income areas.

CT/KDF Community Development Partners will provide equity at a discount of up to 50 percent of market rate for developments that combine affordable for-sale workplace condominiums with retail stores and offices. To be eligible for financing, the project must also be located in the six-county Southern California region.

The selection process for NMTC funding is highly competitive. Only one of four applicants was selected in the most recent round of funding. Five community development entities, including CT/KDF Community Development Partners, were chosen to serve regions in California. In total, 63 entities were selected with awards ranging from $2 million to $143 million. Since the inception of the NMTC Program, $12.1 billion in tax credits have been awarded. CT/KDF received one of the largest awards to a private firm that in conjunction with construction financing and the re-investment of proceeds could result in the firm making investments in excess of $400 million. Depth of experience and a successful development history in both commercial and affordable housing were primary reasons the CT/KDF team was chosen. Combined, the team has been involved in the financing and development of a wide variety of real estate projects over the last 12 years. Approximately 210 projects involving total capital in excess of $2 billion have been completed.

About KDF Communities: Since 1997, KDF Communities has used the proven expertise of its team to build and acquire a long-term portfolio of more than 4,300 affordable rental units located throughout California. While each development is unique, the company has been steadfast in its long-term commitment to both properties and communities. As such, KDF Communities closely monitors the management of every property it develops, making certain to serve as a stable and trusted landlord for families seeking a safer, better life. KDF Communities is headquartered in Newport Beach, California with properties in communities such as San Francisco, San Bruno, San Jose, Anaheim, Camarillo, Huntington Beach and Hesperia, to name a few. Visit the website at www.kdfcommunities.com

About CT Realty Corp: Since its establishment in 1994, CT Realty Corp. has completed more than 140 transactions totaling more than $2 billion, which includes acquisitions, sales, development and redevelopment. In addition, the company provides development equity financing through strategic partnerships with developers in the Southwest. The focus of CT Realty’s investment activities is to acquire well-located assets with the potential to enhance their value through a solid, hands-on approach. Asset types are industrial, suburban office, mixed-use, single-family and multifamily residential, senior housing, retail, golf course and self-storage properties. Visit the website at www.ctrealtycorp.com.