CHICAGO, IL- The MACK Companies has just announced the sale of another 93 single-family homes to American Residential Properties, an Arizona-based REIT, for more than $12 million. This follows a similar $28 million December deal between the companies for a collection of 196 homes, an agreement that MACK officials described as the largest performing single-family asset deal in the United States in 2012.
MACK and ARP have an agreement which they say will transfer 30 to 50 homes each month from the Tinley Park-based MACK to ARP and may eventually total 1,000 homes. MACK mostly purchases foreclosed homes within 30 miles of its headquarters and continues to manage the properties after transferring them to ARP.
“This deal reflects another step in the long-term partnership between MACK and ARP,” said James McClelland, president and chief executive officer of MACK. “As the single-family rental market continues to flourish, we know that there will be ample opportunities to provide ARP with the product that they seek—performing single-family homes, expertly managed in prime locations.”
The housing bust flooded the market with thousands foreclosed single-family properties. And MACK officials believe that even after the housing market recovers, for-rent single-family homes will continue to play a big role.
“I think we are seeing a shift in society," said Eric Workman, MACK's vice president for sales. "I don't want to say that it's now taboo to own a home," he added, but after such a sweeping foreclosure crisis, "the idea of getting into an ownership situation is not as ideal as it used to be." Furthermore, more stringent lending standards will mean "a lot of people get cut out of the for-sale market because their job or income disqualifies them."
Workman estimates that the state has about 82,000 homes at some stage of foreclosure, and since it takes about two years for an Illinois home to work through foreclosure, these properties will continue to flow steadily into the market for years.
"If 80,000 foreclosures were just dumped onto the market it would cause havoc. But it creates an opportunity for companies like ours because when a property remains vacant for two years it becomes very distressed."
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
