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Wednesday, July 23, 2014

ARC to auction off six area mobile home parks

By Dan Voorhis
The Wichita Eagle

American Residential Communities, the Denver-based owner of 13 mobile home parks in the Wichita area, is auctioning off about half of its local portfolio.

The company has listed six parks with about 830 lots – including the Towneships at Clifton, El Caudillo, Audora, Sleepy Hollow, Sycamore Square in Wichita and Sunset 77 in Douglass – with Auction.com.

According to the sales listings, the six Wichita area parks are about 40 percent occupied. The properties are listed as distressed.

The parks are listed separately and will be auctioned off online over two days starting June 26, according to a spokesman at Auction.com.

ARC’s website lists the company as also owning seven other mobile home parks in the area.

The company did not respond to a set of emailed questions.

The parks were purchased in the 1990s by Affordable Residential Communities of Denver during what turned out to be a bubble in the financing of mobile home purchases. ARC capitalized on the boom in mobile home ownership by buying and upgrading older parks. It became one of the largest owners of mobile homes parks in the country with 270 parks.

The mobile home financing bubble collapsed in 1999-2000 leading to tighter credit and a wave of mobile home foreclosures. The parks also lost customers in the first half of the decade as easy mortgage terms pulled people into regular houses. In one indication of the decline in mobile home ownership, the number of new mobile homes shipped to Kansas buyers peaked at 3,885 in 1998 and fell every year afterward, according to the Manufactured Housing Institute. There were 323 shipped in 2011.

When the housing bubble collapsed in 2007, private equity firms bought ARC’s entire portfolio for $1.8 billion and renamed the company American Residential Communities, according to company SEC filings. According to a 2010 article in the Wall Street Journal, the firms bet that those who lost their homes because of subprime mortgages or other issues related to the housing collapse would flock to mobile homes, but that didn’t happen because credit conditions remained extremely tight. The new ARC was looking to refinance its debt in 2010.

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