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VOL. 37 | NO. 27 | Friday, July 05, 2013

Big deal: 118 La Vergne homes go to one buyer for $10.4M

By Joe Morris

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When developer Amnon Shreibman filed one of Nashville’s largest-ever Chapter 11 bankruptcy cases last year, a big “what if’’ was whether or not his multiple properties could be divided successfully.

At least part of that question has been answered in the form of a $10,485,562 purchase in Rutherford County by Scottsdale, Arizona-based American Residential Leasing Co.

Shreibman was more than $50 million in debt and owned properties ranging from residential developments to retail and restaurant sites. As a part of his Chapter 11 filing, he surrendered mostly undeveloped property to banks and creditors, but held on to income-generating properties. The plan is for those properties to generate income to further reduce debt or be sold for the same purpose.

The Rutherford County deal, consisting of 118 total properties, including 26 residential properties currently being leased in the 37086 ZIP code, is a part of that ongoing debt settlement, says Shreibman’s attorney, Craig Gabbert of Harwell Howard Hyne Gabbert & Manner.

“It’s part of his plan,’’ Gabbert says. “We disposed of those lots to raise cash to resolve some other issues. Those are houses that are tenant properties, and we believe the buyer will continue to use them for the same purpose.’’

Officials at American Realty were not available to comment, but the firm is one of many to enter the Middle Tennessee real estate market recently.

Since last summer, American Homes 4 Rent has bought up more than 650 houses in a swath stretching from Clarksville to Spring Hill. The firm, based in Malibu, Calif., has spent more than $140 million in Middle Tennessee to date.

These large real estate investment firms are buying foreclosed or distressed properties at bargain prices, and then holding onto them for rentals rather than putting them back on the market as conditions improve. It’s a new trend for large real estate holding firms, analysts say, and comes as many of them prepare for and move the process of going public with stock offerings.

American Residential Properties Inc., the parent entity of American Residential Leasing Co., for example, raised $287.7 million in an initial public offering back in March.

Banks and investors have supported the company, and others in the same sphere, because they see a strong demand for rentals as home ownership rates have declined in recent years due to foreclosures and the overall economic malaise.

Some 14 million single-family homes are rented nationwide, with an asset class worth $2.8 trillion, according to a recent report from Goldman Sachs Group Inc.

Those following the trend for large-scale rental buying say that it’s too early to tell if it will be beneficial to these firms, or if they’ll wind up putting these houses back on the market, sooner rather than later.

Local analysts say the purchases to date are only a fraction of home sales, and so they shouldn’t overly affect either overall home sales in Middle Tennessee, or the rental market in terms of availability and pricing.