Previously known as Affordable Residential Communities, ARC was taken private in July by Farallon Capital Management, Helix Funds and GEM Realty Capital for more than $1.79 billion in cash and assumed debt, according to SEC filings. Jeffrey Mishkin, the San Francisco-based national director of M&M's Manufactured Home Communities Group tells GlobeSt.com that the private equity firms are now in the process of winnowing the portfolio down to a more manageable size.
"They told us 'it's too many properties to own,'" Mishkin says. "There will be additional properties."
The initial 25-property listing includes 17 properties in Kansas, four in Colorado and four in Texas. All of the properties are connected to city utilities and, according to the industry's standard rating system, are 2.5- to 3.5-star quality properties. As for the investment potential, Mishkin says there is substantial upside to be had in rents, through filling up vacant spaces and by selling park-owned homes.
The Kansas portfolio, located primarily in Wichita, includes 2,778 home sites that are 60% occupied. Approximately 20% of the home sites have park-owned homes on them. The 2007 NOI is estimated at $3.3 million, Mishkin says.
The Colorado portfolio, which includes properties in Pueblo and Commerce City, includes 816 home sites, 78% of which are leased. The portfolio's estimated 2007 NOI of $1.51 million. The Texas portfolio, which includes properties in Tyler and Temple, includes 788 home sites. The portfolio is 71% occupied; its estimated 2007 NOI is $1.18 million.
There is no asking price for the properties. Mishkin says the deadline for offers on the Kansas portfolio is Dec. 17. The offer deadline for the other portfolios will be early 2008, he says.
The same month ARC was taken private San Francisco-based Stockbridge Real Estate Funds and real estate private equity incubator BaseCamp Capital LLC agreed to acquire Clayton Homes' manufactured home communities division, which includes 18,000 home sites in 65 communities in 11 states. The details of the acquisition have not been made public. The seller is Berkshire Hathaway, which acquired Clayton Homes in 2003 for $1.7 billion.
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