TINLEY PARK, IL—Locally based Mack Cos. has sold 196 rental properties to American Residential Properties for $28 million.
James McClelland, president and CEO of Mack, said the sale to the Scottsdale, Ariz.-based American REIT is the largest single-family asset deal in the United States in 2012. “With good reason there’s been a significant increase in interest from institutional investors wanting to enter the single-family market this year, but the only deals the industry has seen close so far have been bulk foreclosure buys on homes that still need to be redeveloped and leased,” he said in a statement Thursday.
He said the two companies have also reached an agreement in principal that would supply ARP with up to 30-50 properties each month during the next 24-36 months. The transactions would mean another 1,000 properties purchased from MACK, said McClelland
Mack has been buying foreclosed single-family homes in Chicago’s south suburbs for more than 15 years, redeveloping them and turning them into rentals – selling hundreds along the way to investors. Mack will continue to stay on as property manager.
Steve Schmitz, CEO of American, said in the statement that it believes the Mack properties are the best in their markets. “We’ve been looking at entering the Chicago market for a while given its high foreclosure volume and robust demand for single-family rentals, but we didn’t want to partner with a firm just because it had a large amount of inventory – it had to be the right inventory,” he said. “We liked that they were very discerning in their buys, because we’re discerning in ours.”
Mack purchases, redevelops and leases a new home every three days. The firm currently manages approximately 600 single-family rentals, of which it owns 350 of those properties.
