Like just about everyone else in the industry, Dick Kadish, president of Bethesda, Md.-based CAPREIT, hadn’t seen a lot of hard asset acquisitions coming his way over the past couple of years. But that didn’t keep him from working on deals.

After spending a year in negotiations, the company and Tampa, Fla.-based Morrison Grove Capital Advisors formed Morrison Grove CAPREIT, a joint venture armed with buying the low-income housing tax credit asset management business of Credit Suisse in May. The transaction will provide Morrison Grove CAPREIT with the asset and/or property management of approximately 15,000 apartment homes across 240 properties in 31 states.

The fee stream from asset management was definitely attractive to Kadish, but it wasn’t the only reason he joined forces with longtime business associate Charles M. Pinckney, president and CEO of Morrison Grove, to bring several million dollars to the table and secure the Credit Suisse business. “We also see where there’s an opportunity—in instances where you have a general partner that has fallen by the wayside, you can step into those shoes,” Kadish says. “You can become the general partner and are entitled to earn general partner’s fees if, in fact, you operate the thing correctly. You also have the opportunity to earn property management fees should the property management firms go by the wayside as well.”

Already, Morrison Grove CAPREIT has had the opportunity to step into the general partner role at one of the properties in the portfolio—Warren Manor in Warren, Ark. Kadish says both the general partner and guarantor disappeared at Warren Manor. The property was only 55 percent occupied, and Kadish says the property hadn’t been in tax credit compliance before the Arkansas State Housing Finance Agency in 2007, 2008, and 2009. “We restored the financial health of the property,” Kadish says. “We got the 2007, 2008, and 2009 tax credits straightened out and got the Arkansas State Agency to write letters indicating that we were in compliance. We appointed a property manager that was local. The property is now 100 percent occupied. It has financial health. The bills are being paid.”

Though this isn’t the first tax credit turnaround for CAPREIT (it helped turn around the Creekside at Taskers Chance Senior Apartments in Frederick, Md., last year), the firm has been in the tax credit game for only about five years.

And now, as Kadish continues to incorporate the Credit Suisse asset management business, he’s starting to once again see some movement on the market-rate side. He says he has deals in Florida and Minnesota under contract for purchase and another two deals in the same states under contract to sell. “For the past year-and-a-half, it has been difficult trying to buy or sell anything,” Kadish says. “That malaise has disappeared almost entirely.”