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Machiavellian “Godfather” – Sam Zell, Warren Buffett, Capital, Lending and Crossed Lines in Manufactured Housing

November 17th, 2018 Comments off

 

MachiavellianGodfatherSamZellWarrenBuffettCaptilLendingCrossedLinesManufacturedHousingDailyBusinessNewsMHProNews

Keep your friends close,

and your enemies closer.”

 

This [saying] has frequently been ascribed to Sun Tzu and once in a while to Niccolò Machiavelli or Petrarch,” says Edwar Louk in Quorayet there are no distributed sources saying which was its origin before its utilization by “Michael Corleone” in The Godfather Part II (1974), composed by Mario Puzo and Francis Ford Coppola: “My dad taught me numerous things here — he educated me in this room. He trained me — hold your friends close but your enemies closer.”

 

There’s a well known U.S. affordable housing crisis. Lawrence Yun at the National Association of Realtors said earlier this year that only builders getting really busy will close the gap, which he estimated at the time as 8.3 million housing units.  A number of tech gurus have said that only factory-home building can close that housing construction needs gap.

Several sources cited at the end of this report are from outside of the manufactured housing industry.  They have said, after researching the matter, that modern manufactured homes (MH) are an obvious part of the solution for the affordable housing crisis.  They include, but are not limited to:

  • The National Association of Realtors,
  • the Urban Institute,
  • Bloomberg,
  • Fannie Mae,
  • Freddie Mac,
  • Value Penguin,
  • HUD Secretary Ben Carson,

and others are among those in 2018 that have praised the quality, surprising safety, and value of today’s manufactured homes.

Yet the manufactured housing industry struggles in its actual performance, in bottom-line new-home sales. Why?

The reasons are many, such as

  • placement/zoning,
  • media/image,
  • regulatory and more.
  • But let’s focus for the next few minutes on access to capital and financing.

There are few in manufactured housing who can as credibly claim to understand the import and legal methods of raising capital as Equity LifeStyle Properties (ELS) Chairman Sam Zell.

Zell has numerous other business interests.  He is worth billions.  He’s been quoted saying he is happy to be correct 60 or 70 percent of the time. Billionaire Warren Buffett has famously been critiqued – and admitted on occasion – to making mistakes or missing opportunities too. Not to worry, because the baseball slugger who consistently bats .350 or better is worth millions annually.  Thankfully, no one has to bat a 1,000 to be successful.

So perfection isn’t the standard in business or investing. Consistency, overall performance, quality, profitability, legality – and hopefully ethics are, or should be – the standards. Toyota recently recalled 192,000 Prius vehicles in the U.S. alone.  Pay attention, because that won’t cause much of a hiccup for sales by Toyota.  So why, by contrast, does bad news so routinely harm manufactured homes so much more?

 

Stating the Obvious Brings Clarity

It bears stating the obvious. Manufactured housing is made up of a myriad of interrelated and specialized interests. They include, but are not necessarily limited to:

  • the production of manufactured homes,
  • the sale of manufactured homes,
  • the transportation and installation of manufactured homes,
  • land-lease manufactured home communities,
  • financing of manufactured homes (wholesale inventory and retail sales),
  • due diligence firms,
  • legal, accounting, HR, and compliance experts,
  • associations,
  • and the list goes on.

Furthermore, the manufactured home (MH) industry can be segmented into corporate giants, mid-level, smaller or even ‘mom and pop‘ sized enterprises.

Zell’s and Buffett’s interests in the MH Industry have both been represented on the Manufactured Housing Institute (MHI) Executive Committee level for years.  That’s where the power is at the MHI trade association.

The two moguls each know how to attract media when they want it. But given all that, it should not be construed to mean that Buffett or Zell’s interests are always in synch.

Nor are Buffett’s and Zell’s politics apparently in alignment.

 

 

ZellSamuelOpenSecretsCampaignContributions2018ManufacturedHousingIndustryDailyBuisnessNewsMHProNews

According to Open Secrets, which relies on public records, Sam Zell gave 100 percent to Republican candidates up to the 2018 reporting period reflected in the graphic, shown above. By contrast, Warren Buffett gave 100 percent of his campaign contributions to Democratic ones, as the image below demonstrates.

WarrenBuffettMarketWatchGivingIn2018CampaignDemocrats

 

Keep you friends close, and your enemies closer. With that backdrop, it is useful for manufactured home professionals to glance at the concept of interlocking directorates.

 

InterlockingDirectoratesGraphicExampleManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

Business Dictionary defines ‘interlocking directorates’ thus, “Membership on the boards of directors of two or more firms by the same individual. It is normally legal except where the firms are mutual competitors, but is usually considered undesirable because it allows firms to exchange non-public (privileged) information and, therefore, may hinder fair competition.”

 

InterlockingDirectoratesDefinedDailyBusinessNewsMHproNews

 

Note that their definition is perhaps a bit legalistic. It’s because there are subtle ways that interconnected operations can influence other:

  • companies,
  • nonprofits,
  • foundations,
  • political organizations,
  • or governmental agencies,

which can then be wielded in a dynamically similar way as interlocking directorates operate.  As a reminder, here are MHI’s antitrust guidelines, and note the highlighted portions.

 

Interlocking Directorates

What perhaps too few in the trenches of manufactured housing grasp are how influence, information, and even power can be wielded by means of connections that are technically public, but if unreported or ignored, are effectively invisible. That isn’t a conspiracy, and it can be done in legal or illicit ways, as the prior definition, link to MHI’s antitrust guidelines, and graphics above itself suggests.

Those like Zell grasp this reality well, per our industry sources.

But that doesn’t mean that elites and/or their field leaders can also be blindsided by revelations such as Buffett’s obliquely funding activist protest groups, such as via the Tides Foundation, which in turn funds:

 

NovoFoundationWarrenBuffettTidesFoundationFundsMHActionManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

Those bulleted activist groups are politically leftist, democratic socialist, or Democratic party in orientation. It’s what Buffett lieutenant Tim Williams, President and CEO of 21st Mortgage, a Berkshire-brand lender in manufactured housing, called aprogressive” “threat” that challenged manufactured housing. Yet Williams himself, per our sources, has personally contributed to progressive candidates, and via Political Action Committees (PACs), to several others.  We’re in football season, so can you spell, ‘head fake?’

Bluntly rephrased, Buffett has funded through various channels radical and leftist organizations that have deliberately targeted Zell’s ELS brand.

Let that sink in.

And if you are Sun Communities, UMH Properties, or any other sized manufactured home community or other MH operation, ponder this question. If Buffett’s money was used to target Zell, why wouldn’t they your or any other firm too?

 

WarrenBuffettGeorgeSorosPhotosHUDSecBenCarsonTidesFoundationLogoMHActionLogoMHActionProtestorPhotoManufacturedHousingIndustryMHProNews600

Warren Buffett has been funding leftist and Democratic causes and candidates for years. Among them are MHAction, which targeted via protest and mainstream media, ELS, among others in the industry. MHAction – which again benefited from cash that flowed from Buffett – also disrupted the address by HUD Secretary Ben Carson in Las Vegas last April.

 

Furthermore, Buffett’s Berkshire brand Clayton – per sources – has purportedly paid one or more writers who have spotlighted speaker/authors like Esther Sullivan. Professor Sullivan presents a mishmash of pro- and anti-manufactured home positions, most notably negative with regard the owners of certain manufactured home communities.

That’s not to say that only ELS has been targeted by progressive groups interconnected to Buffett’s financial largess. So have:

  • Frank Rolfe of MHPFunds/RV Horizons and his partners,
  • Blackstone – which entered manufactured home communities this year – and other community owners have been targeted by groups that were funded by sources that were given millions from Buffett’s coffers.
  • It’s not speculation, because there’s a public record and a money trail.

MHAction, MoveOn, The Indivisible Project, AntiFa are among those that have also targeted HUD Secretary Carson, others in the Trump Administration, including protests of President Donald J. Trump himself.  Battle lines are being drawn by Buffett on the political left and people like Zell who favor more pro-business policies, like those of the GOP and it’s disruptive 45th president.

 

WarrenBuffettBillClintonHillaryClintonBarackObamaKevinClaytonNathanSmithPhotosDailyBusinessNewsMHproNews600

 

A Surprising Discovery

MHAction directly and indirectly revealed to MHProNews their lack of interest in ‘small fish‘ like manufactured home community professionals, George Allen, Spencer Roane, Tom Lackey and SECO. Those three and their ‘education’ all have ties to business tactics that led the Chattanooga Times Free Press and other media to spotlight allegedly illegal activities that harmed numerous consumers. Per mainstream media and other sources to MHProNews, various public officials in Georgia and elsewhere are reportedly investigating those concerns.

 

TonyaEvansLost16000InvestedInHomeSheSaysPurchasedfromTomLackeyStoneyPointeMobileHomeParkManufacturedHousingIndustryNewsMHProNEws

If MHAction cared so deeply about ‘victims’ of ‘predatory companies,’ where were they on this issue? MHProNews knows from multiple sources that MHAction was aware of these events, but opted not to act on behalf of those residents. Learn more, linked here.

 

Put differently, there is an open question as to what motivated and directs MHAction or others, to target Zell, Rolfe and Blackstone instead of others like the example noted in the report about Lackey and company, which are linked from the image above and below.

 

TomLackeyPhotoGeorgeAllenphotoSpencerRoanePhotoMHVillageLogoMHIDailyBusinessNewsMHProNews

Click here to learn more. If the pro-manufactured home industry’s trade media doesn’t police its own, then mainstream media and public officials will eventually do it instead. Accountability is a traditional role for any industry’s good trade media.  Click here to learn more about the troubling tales about Lackey, Roane, and Allen.

 

If MHAction and their allies are posturing as fighting for the ‘little guy’ who leases a site from an alleged problem operator, why did MHAction or other resident groups effectively ignore defending the purported victims of Tom Lackey? After all, various public accounts, and governmental investigations, claim and are investigating Lackey and his defenders/promoters shown above as potentially guilty of serious criminal and civil offenses.  Of course, like Buffett or anyone else, they are deemed innocent in the eyes of the law, until they plead or are proven guilty in a court of law.

So why does MHAction go after firm’s like Zell’s instead?

That’s not to suggest that Ken Borden at MHAction gets a call from Warren Buffett – that’s unlikely and unnecessary. All that billionaire Buffett has to know is that his money went to the Tides Foundation, and trusting the Tides’ track record would be enough for him. See what Buffett says in his own words, further below, about not-micromanaging. Then someone like Borden will be identified and selected, and they will know what to do, and not do.

 

PavingTheRoadToHellMHActionKevinBordenNYCCJonathanWestinDailyBusinessNewsMHProNews

Facts are facts. Borden and leftist NY Communities for Change, an offshoot of the now defunct, and scandal plagued ACORN, targeted ELS communities that were reportedly well run and operated within the law. By contrast, MHAction ignored Tom Lackey, George Allen, Spencer Roane and their colleagues. An on-the-ground source told MHProNews that Lackey’s community was “a slum.” Which begs the question. Is MHAction and other like organizations funded by Tides the strong arm tactics of the political left? Are they part of a shakedown, worthy of a RICO and other investigations by state or federal authorities? Legal sources have suggested precisely that could be true. For more on Borden, and MHAction, see “Paving the Road to Hell,” at this link.

 

Why This Matters to Firms of All Sizes in Manufactured Housing

Companies of all sizes in manufactured housing routinely need access to capital and financing.

Every sized operation is impacted by the industry’s stigma, which Clayton Homes and MHI posture at addressing, but have arguably clearly failed at fixing. The evidence? New HUD Code home sales statistics are a stark reminder.

 

ManufacturedHousingInstituteLogoMHILogoSept2018MonthlyEconomicReportDailyBusinessNewsMHProNews (1)

From a report on MHLivingNews.com, which spotlights an article by Lending Tree that is superior to most anything that MHI has produced to ‘promote’ manufactured housing. See that Lending Tree statement – very favorable to manufactured homes – at this link here.

 

It’s the facts – performance – that is the baseline reminder that MHI and Clayton ‘leadership” have failed the industry’s independents.

Marty Lavin, an attorney, MHI award-winner, and long-time finance, community and retail success said that MHI works for the interests of the “big boys.” The interests of other sized firms are only protected to the extent they align with the biggest boys on the MH block, said Lavin. That would arguably be Warren Buffett, Berkshire Hathaway, and their firms that operate in manufactured housing such as 21st Mortgage or Clayton Homes.

  • fact checks,
  • following the evidence,
  • following the Money,
  • following the performance vs. the words and deeds of MHI and others reveals this to be a logical Occam’s Razor reality.

Manufactured home operation of the small- to mid-range sizes were allowed to struggle, fail, or are acquired in part due to capital constraints. MHI failed them, in favor of a mega-billionaire. Who says? Among others, more MH industry award winners, like retailers Bob Crawford, or Alan Amy.

 

 

Zell warned how limiting capital access was a weakness for the industry, as the exclusive quotes below to MHProNews via the late Howard Walker – then ELS Vice Chairman – reflect.

 

 

MHI’s Former President Said…

MHI’s prior president, Chris Stinebert also warned the industry in a parting published message.  That’s found in a column in the Journal that was arguably a thinly-veiled warning to manufactured housing professionals.  Stinebert’s article could be read as a parting slap at MHI.

Every industry professional in the manufactured housing is directly or indirectly impacted by these factors MHI’s former president noted. Restricting financing limits sales, which harms affordable home ownership.  Note, one need not agree with Stinebert’s suggested cure to his point #4 to realize that he felt that there were problems with lending and capital access that needed to be addressed.

Not long after Stinebert exited MHI, the industry was about to be hit by the 2008 housing/finance meltdown in a way thousands of industry professionals did not anticipate.

 

A Smoking Gun…

Money trails are used by prosecutors and civil attorneys, say legal experts to MHProNews, to demonstrate what could be patterns of behavior. FBI officials have previously told the Daily Business News on MHProNews that a significant number of special agents are versed in accounting and other forms of business and financial expertise.  That’s precisely done so they can spot and find schemes that can be charged in court with various kinds of “white collar” illegal behavior.

Harvard’s Eric Belsky believed circa 2002 that manufactured housing would dominate conventional housing by 2010. Belsky knew about the repossession glut related to Conseco, Greentree or other now defunct MH lenders. Belsky still believed manufactured housing would not only recover, but would dominate.

Had Harvard’s expert been correct, the nation could have saved tens of billions annually. Furthermore, per research outlined on Value Penguin, the U.S. could gain $2 trillion annually in gross domestic product – impact similar to the Trump Administration regulatory roll backs or the 2017 tax cuts – if the affordable housing crisis was properly addressed.  And using manufactured homes, that could be done simply by enforcing existing laws.  No new legislation is needed. No need for years of debate.  Just enforce the law.

 

How did Belsky miss his estimates about the future of manufactured homes?

Because he failed to anticipate that Buffett’s Berkshire Hathaway would buy Clayton Homes in 2003. That same year, Berkshire bought and rolled Oakwood Homes into Clayton, and would create via acquisitions the largest operation in manufactured housing.

Among those units acquired was 21st Mortgage Corp.  But let’s look for the next few moments at the 2008 housing/finance crisis.

During the calamity of the aftermath of 2008, an independent manufactured home producer then told MHProNews what 21st was about to do. But it wasn’t until recently that an actual document – a purported “smoking gun” from 21st’s Tim Williams to independent retailers was actually obtained. The document, shown further below, explained why 21st would only be cutting financing support to non-Clayton Homes manufactured housing carrying independents.

During a crisis, when people are desperately trying to swim for shore, details can often get lost in the fog of panic and pressure.

Thus, some issues only come into focus after a crisis – like the 2008 housing/mortgage meltdown – has come and gone.

When the Urban Institute or others study the manufactured home industry, and they ask why manufactured home sales are at such relatively low ebb, the 21st document, quotes from Buffett, and the videos that follow ought to be among the top exhibits examined.  So how did the Urban Institute – which also gets funded by Buffett, and where he is a life-time trustee – miss all three elements?

When federal officials, investors, and others wonder why manufactured homes haven’t done better, given the affordable housing crisis, these are important starting points for a clear understanding.

And when independent manufactured home retailers are wondering about the future – as which supplier(s) and service providers they should use – an adage ought to be applied.  Namely, that a reasonable predictor of future behavior is past behavior.

21stMortgageCorpLogoLetterheadJan302009TimWilliamsRetailersBrokersCutSpecifiedLendingMonopolisticPloyConcernManufacturedHomeDailyBusinessNewsMHProNews

This document was provided as a news tip to MHProNews. To see the PDF of this document, click here or above.

 

The result was predictable. As a former Clayton manager, Ken Corbin publicly said, some 10,000 independent manufactured home retailers vanished. That bold move reflected by the 21st Mortgage document obviously harmed those independent retailers.  But it also hurt:

  • manufactured home communities, that for years relied upon retailers to sell homes into their communities.
  • independent manufactured home producers, which MHI’s own records reflect – see below – fell in numbers following the impact of the 21st document above, which Tim Williams signed.
  • several independent transport, installation, suppliers and others were lost or absorbed by larger firms, as the consequences mounted.

 

 

What’s often missed is that not long after that letter that Williams claimed 21st regrettably had ‘no choice,’ Kevin Clayton was bragging in the video below that “Warren” told him that they had “plenty of money.”

But perhaps the strongest example of how misleading the 21st document from Tim Williams arguably is comes from quotes from Warren Buffett’s own annual letter. Like the Clayton interview video included in this report, Buffett’s own words make it clear that Berkshire could have continued funding 21st, and thus, the industry’s independents.

Instead, they collectively killed off thousands of independent firms, purportedly by pulling the financing – the access to capital – that ELS’ Zell or Harvard’s Belsky both said are so necessary.

EricBelksyManufacturedHousingIndustryManufacuredHomeManufacturedHousingInstituteResearchDataAffordbleHousingMHProNewsDailyBuisnessNews575

Why did Belsky miss his predicted date? Because it came before Buffett’s entry into MH? Note that MHI, Tim Williams/21st and Clayton have all been asked to address these concerns.  At no time have they even tried to explain it, though previous to such inquiries they would give prompt replies to this trade media outlet.  How is that to be explained?

 

Quotes from Buffett’s Letter

Our gain in net worth during 2009 was $21.8 billion, which increased the per-share book value of both our Class A and Class B stock by 19.8%. Over the last 45 years (that is, since present management took over) book value has grown from $19 to $84,487, a rate of 20.3% compounded annually,” said Warren Buffett, Chairman of Berkshire Hathaway, in his 2009 annual letter to shareholders.

Here are a few examples of how we apply Charlie’s [Munger, Berkshire Vice-Chairman] thinking at Berkshire: Charlie and I avoid businesses whose futures we can’t evaluate.”

In manufactured housing, that meant that Buffett and Munger had no doubt about the future of the industry. Investors, take note.

When the financial system went into cardiac arrest in September 2008, Berkshire was a supplier of liquidity and capital to the system, not a supplicant. At the very peak of the crisis, we poured $15.5 billion into a business world that could otherwise look only to the federal government for help,” said that same 2009 annual letter.

What did that mean for manufactured housing professionals? Simply this. That the 21st Mortgage Corporation letter to independent retailers includes claims that were at best mistaken, misleading – or even false – assertions.

Berkshire made billions that year. Buffett’s conglomerate lent billions that year, his letter said. Yet, 21st had the chutzpah to claim they couldn’t lend to manufactured housing retailers that didn’t carry Clayton Homes product? 

To better grasp the principles of how and why this was done, one must understand Buffett’s concept of the ‘strategic moat.’  The short video below explains part of it, in Buffett’s own words.

 

 

Lines were arguably crossed, or perhaps the better prose is ‘double crossed.’ While Kevin Clayton smiles in the video that follows, as he says how much Clayton valued independent retailers, what they collectively did to independents fails to match those sweet-sounding words.

 

 

Applying MHI award-winner, Marty Lavin’s mantras, “pay more attention to what people do than to what they say,” and “follow the money.”

That debatable double-cross may be why Zell stays in MHI, to – ala the mantra at top – to “keep your friends close, and your enemies closer.”

 

More from the Oracle of Omaha…

What Buffett Said – Who’s Responsible?

We tend to let our many subsidiaries operate on their own, without our supervising and monitoring them to any degree…Most of our managers, however, use the independence we grant them magnificently, rewarding our confidence by maintaining an owner-oriented attitude that is invaluable and too seldom found in huge organizations,” said Buffett that year.

But it should also be recalled that Buffett preaches about ‘widening the moat.’   See all of the Buffett videos on the key Kevin Clayton videos on the page, linked here, or watch the videos posted on this page.  Clayton talks about ‘widening the moat’ and besting competitors repeatedly in the video. 

Buffett referenced this from his 2008 annual letter, “We are certain, for example, that the economy will be in shambles throughout 2009 – and probably well beyond – but that conclusion does not tell us whether the market will rise or fall.”  He chastised many in media for sensationalism, adding: “Any investors who were misled by the sensationalists paid a big price: The Dow closed the day of the letter at 7,063 and finished the year at 10,428.”

Skipping deeper into that 2009 Buffet annual letter to Berkshire shareholders, we find the section that deals with Clayton Homes, and manufactured housing.  Note that the graphics shown are by MHProNews, but reflect data from Berkshire or others sources, as shown.

ClaytonHomesOakwoodHomesBerkshireHathawayMarketShareofManufacturedHousingEndof2003DailyBuisnessNewsMHanufacturedHousingIndustryProNews

“Finance and Financial Products

Our largest operation in this sector is Clayton Homes, the country’s leading producer of modular and manufactured homes. Clayton was not always number one: A decade ago the three leading manufacturers were Fleetwood, Champion and Oakwood, which together accounted for 44% of the output of the industry. All have since gone bankrupt. Total industry output, meanwhile, has fallen from 382,000 units in 1999 to 60,000 units in 2009.”

By the way, the industry shipped 372,000+ in 1998 – not 1999. And in 2009, the total shipments were under 50,000 homes  So, that last sentence above by Buffett has two apparent fact errors.

Figure1MobileManufacturedHomeSalesSHipmentsVsExistingingNewHouseSalesManufacturedHousingiinudstryDataMHProNews

From the National Association of Realtors.  There are a growing number of industry voices that believe that BH/CMH and MHI have by various action/inaction has kept manufactured home sales at historically low levels. The evidence is found herein and are also linked from Related Reports, further below.

 

 

The collapse of so many companies in manufactured housing has several causes, including, but not limited to, the image issues fostered by groups like MHAction. 

But cutting off capital – in the form of lending – has to be high on the list, if not on top.  High rents, high conventional housing costs, these are historic reasons for strong performance for manufactured homes. So how could MHI’s president, in the video above, say with a straight face that the industry must accept slow growth?

 

ClaytonHomesBerkshireHathawayMarketShareofManufacturedHousingEndof2011DailyBuisnessNewsMHanufacturedHousingIndustryProNews

 

The market share graphics, based upon various industry reports and sources as shown, tells the tale of how Clayton used ‘the moat‘ of financing and other tools to rapidly increase their market share.  Note that doing so arguably shrank the overall market, as it increased their market share.

 

ClaytonHomesBerkshireHathawayMarketShareofManufacturedHousingEndof2017DailyBuisnessNewsMHanufacturedHousingIndustryProNews

 

 

But because of MHI’s problematic track record, which even their former chairman Nathan Smith (above) and MHI member Frank Rolfe (below) in the videos above and below, the trends shown herein advanced.

 

ClaytonHomesSkylineChampionCavcoIndustriesMarketShareManufacturedHousingIndustryConsolidationGraphicPieChartMHProNews-e1528746976415

FrankRolfeNegativeArticlesOnIndustryNoCommentbyManufacturedHousingInstituteMHIRVHorizonsMobleHomeUniversityPostedDailyBusinessNewsMHProNews-575x132

 

 

Evidence that it isn’t just coincidence or some other mystery is found in the RV Industry’s performance during the past 2 decades. Compare their trends to that of manufactured housing during those same years.

 

RVsshipmentsTrailedMH1998WinnebagoDailyBusinessNewsMHProNews

 

That’s arguably among the reasons why industry voices, such as the Manufactured Housing Association for Regulatory Reform (MHARR) – which focuses on federal production-related issues – has encouraged the industry’s post-production sector to organize a new post-production association.  Because MHI has failed the bulk of the industry for years.

 

MHARR Releases Study Recommending Independent Collective Representation for Post-Production Sector

 

Some in the communities side of the industry have begun to do just that, namely, create a new national MH communities group. And purportedly Berkshire-dominated MHI, not surprisingly, attacked that new communities trade group which publicly explained why they left MHI in the first place.

 

Nathan Smith, SSK Communities, and Manufactured Housing Institute (MHI) Slam New National Manufactured Home Communities Group in Written Statement

 

The industry’s independents have witnessed thousands of firms driven out of business, or that sold out to others for less than their true value. That in turn hurts housing affordability, and thus, the nation.

It was apparently done for the sake of billions of dollars, and to grow Berkshire’s strategic moat in manufactured housing.  It’s demonstrably cost Americans trillions, using the logic of two NBER researchers.

That manufactured housing is a proven solution to the affordable housing crisis – one that is hiding in plain sight – is clear to any open-mind researcher. Manufactured homes have enjoyed political support across the left-right political divide.

 

InfographicMobileManufacturedHomeManufacturedHousingIndustryFactsDataResearchMobileManufacturedHomeLivingNews

 

But “Moat” building Warren Buffett and his minions in MHVille have debatably strangled the industry for years, costing numerous independent businesses millions per location. That monopolistic ploy in turn, for reasons previously linked, has cost Americans trillions in lost GDP.

Is MHAction, MoveOn, et al – and cutting off access to capital, while supporting candidates that support regulations that kill off small businesses – all part of Buffett’s Moat strategy?

 

WarrenBuffettTheMoatQuoteMemeManufacturedHousingIndustryDailyBusinessNEwsMHProNEws

 

The Nation, The Atlantic, GuruFocus, The Seattle Times and others have looked at various aspects of these issues, and on various aspects of the matter, they seem to think so.

But so far, only MHProNews has connected-the-dots across the left-right media divide that linked:

  • Tim Williams/21st “Smoking Gun” Letter,
  • Kevin Clayton video, where Clayton explains how “Warren” uses the Moat, nonprofits and foundations,
  • Buffett’s own annual letter,
  • to the logically avoidable collapse of thousands of manufactured home firms,
  • and now, the way that activist groups such as MHAction has harmed the industry’s image through protests and media coverage.

To date, no one else so far in mainstream media has published the details which are so Machiavellian. Or for those who love gangster movies, it’s a dramatic yet tragic scene that could come out of “The Godfather” series. If Alan Amy in the video above and others in MHVille  are right, Buffett’s lieutenants in MHVille want to “make you an offer that you can’t refuse.”

We’re told by thoughtful attorneys that RICO and antitrust issues are among the concerns they see.

It’s past time for:

  • a law-and-order minded Trump Administration,
  • state attorney generals,
  • private businesses,
  • and specialized civil attorneys,
  • to rise up and stop a corrupt ‘hiding in plain sight’ scheme.

Ending that’s monopolistic “Moat” could revive manufactured homes, and would be part of the affordable housing solutions that would collectively yield to Americans trillions of dollars.

For more details, see the related reports, above and below. “We Provide, You Decide.” © ## (News, Commentary, and analysis.).

(See Related Reports, further below. Third-party images and content are provided under fair use guidelines.)

LATonyKovachGoodBipartisanshipShouldalwaysBepredicatedBenefitallhonestindustrymembersnotslectfewquoteBy L.A. “Tony” Kovach – for MHProNews.com.

Tony is the multiple award-winning managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Office 863-213-4090 |Connect on LinkedIn:
http://www.linkedin.com/in/latonykovach

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Click here to sign up in 5 seconds for the manufactured home industry’s leading – and still growing – emailed headline news updates.

 

Related References:

Seattle Times -Federal Investigations-Berkshire Hathaway’s Clayton Homes, GuruFocus Spotlights Buffett’s Clayton’s “Unethical,” Monopolistic Moat

Affordable Housing, the Visible, Yet Mysterious Struggle for an Obvious Solution, Case Examples

Realtor University, Journal for the Center of Real Estate Studies, Makes Corrections– “The Market for Manufactured Homes,” by Scholastica ‘Gay’ Cororaton, CBE

Urban Institute Ask for Correction in Analysis of their Manufactured Housing Research, “Follow the Facts,” “Follow the Money”

Bloomberg “New Home for $90,000? Manufactured Housing Is Making a Comeback” Reveals MH Media Challenge

Due Credit, Warren Buffett, Media, and Manufactured Housing’s Historic Achievement

MostMenAppearnNeverConsideredWhatHouseIsNeedlesslyPoorAllTheirLivesHenryDavidThoreauManufacturedHomeLivingNews

For newcomers to the website not familiar with modern manufactured homes, learn more by clicking the image above or the link here.

 

 

Canadian and American Financial and Banking Systems Compared, Infographic

May 16th, 2018 Comments off

CanadaUSTaleofTwoBankingSectorsVIsualCapitalistLogoManufacturedHousingIndustryDailyBusinessNewsMHProNews

The Daily Business News reports every day on Canadian based companies as well as U.S. based firms in our evening market report.  But it’s been a while since we’ve taken a broader look at the Canadian market, or done a comparison with how U.S. and Canada are similar and differ.

 

So, the following interesting Visual Capitalist infographic is a step toward providing a look at life north of the longest peaceful border on planet earth.

As is widely known, Canada avoided much of the turbulence that was experienced in the U.S. during the run up to and since the 2008 mortgage/housing crisis.  But like the U.S., affordable housing is an issue north of the border.

Manufactured housing regrettably experiences resistance on either side of the 49th parallel.

Against that backdrop, per RBC Global Asset Management and VC:

General Differences:

Historically, the Canadian banking system favors a limited quantity of banks, and many branches. It also carries the British influence of valuing stability over experimentation. Meanwhile, U.S. banking is more decentralized and localized, and more open to experimentation. This has led to trial and error, but also the world’s largest bank system.”

 

Regulatory Focuses

Canada’s banking system tends to promote safety and soundness, while the American system keys in on privacy, anti-money laundering, banking access, and consumer protection measures.”

 

Market Environment
The Canadian market is worth C$142 billion (US$111 billion) per year, while the U.S. market is over 10x bigger at US$1.4 trillion. Interestingly, these market sizes explain why Canadian banks often seek growth opportunities in the U.S. market, while U.S. banks just focus on the massive domestic sector for growth.”

Number of Banks

There are 85 banks in Canada, and 4,938 in the United States.”

Market Share
Canada’s five biggest banks hold a whopping 89% of market share, while America’s five biggest banks only hold 35% of market share.”

 

CanadaUSBankingFinancialSystemVisualCapitalistComparisonsDailyBusinessNewsMHProNewsRBCGlobalAssetManagement600

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MHProNews will also take this as an opportunity to link up under related reports below of some of the previously published Canadian-connected manufactured housing news. ## (News, analysis, and commentary.)

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Related Reports:

ECN Triad Financial Services – Fascinating Facts, Manufactured Home Industry Professionals, Investors

‘Trailer Park Boys’ Death Focuses Manufactured Home Industry, Homeowners Challenge

New Mortgage Lending Changes Impacting Hundreds of Thousands of MH Owners

Tricon MH Community Stock Insider Trade, Plus Manufactured Home Market UPdate$

UPDATE: MHC Future in Doubt, the Other Side of Rent Control

 

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Smoking Gun 3 – Warren Buffett, Kevin Clayton, Clayton Homes, 21st Mortgage Corp Tim Williams – Manufactured Home Lending, Sales Grab?

May 9th, 2018 Comments off

WarrenBuffettKevinClaytonTimWilliamsClaytonHomes21stMortgageBerkshireHathawayManufacturedHomeLoansMonopolisticConcernsLogoMHProNews

During a crisis, when people are desperately trying to swim for shore, details can often get lost in the fog of panic and pressure.

Thus, some issues only come into focus after a crisis – like the 2008 housing/mortgage meltdown – has come and gone.

When the Urban Institute or others study the manufactured home industry, and they ask why it is at such relatively low ebb, these two documents ought to be among the top exhibits examined.

When federal officials, investors and others wonder why manufactured homes haven’t done better, given the affordable housing crisis, these two documents are an important starting point.

And when independent manufactured home retailers are wondering about the future – as in which supplier(s) and service providers they should use – an adage ought to be applied.  Namely, that a reasonable predictor of future behavior is past behavior.

This Smoking Gun 3 report and analysis will look at two historic documents:

  • an annual letter from Warren Buffett to his shareholders,
  • married up against the letter from Tim Williams, 21st Mortgage Corp President and CEO, which is a Berkshire Hathaway owned unit, and a ‘sister’ company to Clayton Homes.

 

Quotes from Buffett’s Letter

WarrenBuffettBerkshireHathawayChairmanManufacrturedHOusingINdustryDailyBusinessNewsMHProNewsOur gain in net worth during 2009 was $21.8 billion, which increased the per-share book value of both our Class A and Class B stock by 19.8%. Over the last 45 years (that is, since present management took over) book value has grown from $19 to $84,487, a rate of 20.3% compounded annually,” said Warren Buffett, Chairman of Berkshire Hathaway, in his 2009 annual letter to shareholders.

Here are a few examples of how we apply Charlie’s [Munger, Berkshire Vice-Chairman] thinking at Berkshire: Charlie and I avoid businesses whose futures we can’t evaluate.”

In manufactured housing, that meant that Buffett and Munger had no doubt about the future of the industry.  Investors, take note.

When the financial system went into cardiac arrest in September 2008, Berkshire was a supplier of liquidity and capital to the system, not a supplicant. At the very peak of the crisis, we poured $15.5 billion into a business world that could otherwise look only to the federal government for help,” said that same 2009 annual letter. What did that mean for manufactured housing professionals?

Simply this.

That the 21st Mortgage Corporation letter to independent retailers includes claims that were at best a mistaken, misleading – or even false – assertions.

21stMortgageCorpLogoLetterheadJan302009TimWilliamsRetailersBrokersCutSpecifiedLendingMonopolisticPloyConcernManufacturedHomeDailyBusinessNewsMHProNews

This document was provided as a news tip to MHProNews. To see the PDF of this document, click here or above.

Berkshire made money that year.

Buffett’s conglomerate lent billions that year, his letter said. Yet, 21st had the chutzpah to claim they couldn’t lend to manufactured housing retailers that didn’t carry Clayton product?

Buffett’s own words – plus Tim Williams letter to retailers – seem to be in conflict on claims and/or facts.

Wouldn’t a reasonable person be led to believe that Williams was widening the Berkshire moat by choking off lending to independents?

Indeed, many of those companies later sold off to others – including Clayton – for less than they would in a more normal economic circumstance.

Scores of manufactured home connected companies of all sizes, slid into oblivion. Among those firms were those that had years of prior success, and good service to their customers.

How many retailers failed?  How many communities lost the benefits of having retailers sell homes into their properties?  How many factories supporting those retailers sold out for less, or failed as a result of the above?

 

What Buffett Said – Who’s Responsible?

We tend to let our many subsidiaries operate on their own, without our supervising and monitoring them to any degree…Most of our managers, however, use the independence we grant them magnificently, rewarding our confidence by maintaining an owner-oriented attitude that is invaluable and too seldom found in huge organizations,” said Buffett that year.

But it should also be recalled that Buffett preaches about widening the moat.   See all of the Buffett videos on the key Kevin Clayton videos on the page, linked here, or watch the two videos posted below.

Buffett referenced this from his 2008 annual letter, “We are certain, for example, that the economy will be in shambles throughout 2009 – and probably well beyond – but that conclusion does not tell us whether the market will rise or fall.”  He chastised many in media for sensationalism, in quoting only have of that, and added: “Any investors who were misled by the sensationalists paid a big price: The Dow closed the day of the letter at 7,063 and finished the year at 10,428.”

Skipping deeper into that 2009 Buffet annual letter to Berkshire shareholders, we find the section that deals with Clayton Homes, and manufactured housing.

 

Smoking Gun 3…”

“Finance and Financial Products

Our largest operation in this sector is Clayton Homes, the country’s leading producer of modular and manufactured homes. Clayton was not always number one: A decade ago the three leading manufacturers were Fleetwood, Champion and Oakwood, which together accounted for 44% of the output of the industry. All have since gone bankrupt. Total industry output, meanwhile, has fallen from 382,000 units in 1999 to 60,000 units in 2009.”

By the way, the industry shipped 372,000+ in 1998 – not 1999. And in 2009, the total shipments were under 50,000 homes  So that last sentence above has two fact errors.

The collapse of so many companies in manufactured housing has several causes.  But cutting off capital – in the form of lending – has to be high on the list, if not on top.

After all, Harvard’s Eric Belksy said credit is the lifeblood of housing.  At the very time – post 2008 – when hundreds of thousands were walking away from site-built housing due to mortgages they couldn’t afford, why didn’t manufactured housing spike?  Does this choking off of lending and capital – reflected in the 21st letter above – explain why?

But why would Berkshire Hathaway units choke off business for the industry, some ask?

Answer – Buffett routinely says, grow the moat, per Kevin Clayton in the video posted below.  Indeed, the Berkshire/Clayton Homes “moat” grew rapidly from 2009 to 2017.

Kevin Clayton says in the video below that in 2011, Clayton Homes was 25 percent of the industry’s production. By the end of 2017, per Berkshire’s data, it was about 50 percent of the industry’s production. Doesn’t cutting off lending explain that rapid growth in market share? Isn’t that a monopolistic ploy – a market share grab – hiding in plain sight?

What Buffett next describes in his annual letter as an overhang – meaning overproduction – of new housing in the U.S.  He said that the severe drop in new housing starts “Paradoxically, this is good news.”

The second reason that manufactured housing is troubled is specific to the industry: the punitive differential in mortgage rates between factory-built homes and site-built homes,” said Buffett, and he gave a disclaimer that the 21st letter did not phrase in a similar way.  “Before you read further, let me underscore the obvious: Berkshire has a dog in this fight, and you should therefore assess the commentary that follows with special care. That warning made, however, let me explain why the rate differential causes problems for both large numbers of lower-income Americans and Clayton.”

The residential mortgage market is shaped by government rules that are expressed by FHA, Freddie Mac and Fannie Mae. Their lending standards are all-powerful because the mortgages they insure can typically be securitized and turned into what, in effect, is an obligation of the U.S. government. Currently buyers of conventional site-built homes who qualify for these guarantees can obtain a 30-year loan at about 5 1⁄4%. In addition, these are mortgages that have recently been purchased in massive amounts by the Federal Reserve, an action that also helped to keep rates at bargain-basement levels.

In contrast, very few factory-built homes qualify for agency-insured mortgages. Therefore, a meritorious buyer of a factory-built home must pay about 9% on his loan. For the all-cash buyer, Clayton’s homes offer terrific value. If the buyer needs mortgage financing, however – and, of course, most buyers do – the difference in financing costs too often negates the attractive price of a factory-built home.

This was another odd statement, as the more accurate phrasing would be “…negates [some of] the attractive price of a factory-built home,” as the Fannie Mae graphic below from 2011 reflects.

fanniemae-2011-chart1-affordable-manufactured-housing-posted-daily-business-news-mhpronews-

The price difference between much of conventional and new manufactured housing is so great, that even with higher interest rates, the manufactured home remains the bargain in both price and monthly payments.

So both Buffett and Williams made several questionable statements, and some outright fact errors.  But the key is that Buffett’s letter reveals that 21st could have had the money they told their retailers they didn’t have.  The result, was a contraction of credit that killed off businesses or forced many to sell out for less.  Isn’t that monopoly power at work?

 

Two Sides of the Story

It is important to note, that we’ve given several voices with Berkshire Hathaway brands and the Manufactured Housing Institute (MHI) numerous opportunities to explain these seemingly contradictory matters, in writing and/or on stage and by video.

Is there is another explanation that what’s shown in this analysis?  If so, please, let MHI – which has been viewed by voices inside and outside of manufactured housing as dominated by Berkshire Hathaway for years – Mr. Buffett, or leaders of any of Berkshire owned manufactured home brands explain it.

They’ve repeatedly demurred, and we’ve documented several of those outreaches.

So, quoting directly from Berkshire Hathaway or Manufactured Housing Institute (MHI) source documents is the next best thing to presenting “both sides” of the story.  Facts, balance, evidence all matters.

 

Back to the Buffett 2009 Annual Letter

Last year I told you why our [manufactured home] buyers – generally people with low incomes – performed so well as credit risks. Their attitude was all-important: They signed up to live in the home, not resell or refinance it. Consequently, our buyers usually took out loans with payments geared to their verified incomes (we weren’t making “liar’s loans”) and looked forward to the day they could burn their mortgage. If they lost their jobs, had health problems or got divorced, we could of course expect defaults. But they seldom walked away simply because house values had fallen. Even today, though job-loss troubles have grown, Clayton’s delinquencies and defaults remain reasonable and will not cause us significant problems.”

We have tried to qualify more of our customers’ loans for treatment similar to those available on the site-built product. So far we have had only token success. Many families with modest incomes but responsible habits have therefore had to forego home ownership simply because the financing differential attached to the factory-built product makes monthly payments too expensive. If qualifications aren’t broadened, so as to open low-cost financing to all who meet down-payment and income standards, the manufactured-home industry seems destined to struggle and dwindle.”

Once more, by way of analysis, Fannie Mae’s data is different.  But the Government Accountability Office (GAO) also had similar statistics, which demonstrated that even with a somewhat higher finance rate, because of the far lower home price, monthly payments on manufactured homes are still typically considerably less.

But there’s another problem with Buffett’s statement above. The manufactured home (MH) industry has experienced prior shipment levels far higher then – or now – and MH did it with higher interest rates than conventional housing. Pardon me, sir, but shouldn’t that paragraph be rephrased?

TimWilliams21stMortgageCEOMHProNews

Tim Williams, CEO, 21st Mortgage Corp. Photo credit, MHProNews.com

Furthermore, Tim Williams of 21st Mortgage took steps that several sources indicated would contribute to the Government Sponsored Enterprises (GSEs) not making an earlier, and more robust entry, into the manufactured housing marketplace. 

That report, which quotes from Williams and others, is linked below.

In other words, there are several third parties and multiple sources – including Williams – that made it clear that Berkshire operatives took steps that could predictably cause the GSEs not to enter manufactured housing earlier, or more robustly.

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

As Mark Weiss, president and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) has said, every day that the GSEs don’t robustly provide chattel and other lending for manufactured housing is a gift to Berkshire Hathaway.

Bingo.

Continuing from the Buffett 2009 annual letter:

Even under these conditions, I believe Clayton will operate profitably in coming years, though well below its potential. We couldn’t have a better manager than CEO Kevin Clayton, who treats Berkshire’s interests as if they were his own. Our product is first-class, inexpensive and constantly being improved. Moreover, we will continue to use Berkshire’s credit to support Clayton’s mortgage program, convinced as we are of its soundness. Even so, Berkshire can’t borrow at a rate approaching that available to government agencies. This handicap will limit sales, hurting both Clayton and a multitude of worthy families who long for a low-cost home. In the following table, Clayton’s earnings are net of the company’s payment to Berkshire for the use of its credit. Offsetting this cost to Clayton is an identical amount of income credited to Berkshire’s finance operation and included in “Other Income.” The cost and income amount was $116 million in 2009 and $92 million in 2008.

 

Summing Up “Smoking Gun 3”

Tim Williams claimed in the letter sent to retailers that 21st didn’t have sufficient access to money.

Yet, Warren Buffett said that money was being provided to Clayton and affiliates.

Buffett also said that same year, that they loaned money to others.  If they loaned it to others, then why not to 21st and through them, to independents? ## (News, analysis, and commentary.)

(Third-party images are provided under fair use guidelines.)

Related Reports:

Manufactured Housing – Regulatory, Other Roadblocks and Potential Solutions, Up for Growth Research, plus Urban Institute Report Revisited

 

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L. A. ‘Tony’ Kovach addressing industry professionals in an educational session.

By L.A. “Tony” Kovach – Masthead commentary, for MHProNews.com.

Tony is the multiple award-winning managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Office 863-213-4090 |Connect on LinkedIn:
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Tech’s Tumble, POTUS Trump & Antitrust Panel Discussion and Potential MH Industry Impact

March 30th, 2018 Comments off

TechTumblePOTUSTrumpAntiTrustPanelDiscussionPotentialMHIndustryImpact

Among the nation’s many trillion-dollar sectors is housing.

So as tech has taken it’s hit this past week, is it a passing blip?  Or is it as Axios and other media sources suggest, the start of something bigger?

This panel discussion on right-of-center Fox Business looks at some of the factors beyond President Trump and the growing calls in the U.S. for regulatory action – or even a break up – of the tech giants. With markets closed today, this is a timely topic that directly and indirectly can impact the flow of capital.

Will some of that capital flow into manufactured housing?  Should it?

Billions have been pouring into manufactured housing in recent years.  But will even more investment capital be attracted?

Investor$, Manufactured Housing, and Proof of Concept

That related report on why investors may find manufactured housing appealing, is linked above. This is one more aspect of the news through the lens of manufactured housing. “We Provide, You Decide.” © ##

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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.

Imports, Capital, Manufactured Housing, and U.S. Policies

October 9th, 2017 Comments off

HYB1684-313SunshineHomesRedBayALMHLivingNewsMHProNewsMadeInUSAHUDCodeManufacturedHomeSingleSectionIt is widely known in the industry’s circles that most manufactured homes are “Made in the U.S.A.”

Many of the raw materials and comments that go into, or under, a manufactured home are also made or sourced in the U.S.

But there are also an array of items that go into building, and moving manufactured homes that are imports.

  • Canadian lumber,
  • Chinese tires,
  • imported oil,

are just a few of the ways that trade policy enters the manufactured housing scene.

Clayton Competitor Tells MHProNews…

One producer competing with Berkshire Hathaway owned factories on the “entry level” type HUD Code product told the Daily Business News on MHProNews that they import Chinese products “by container loads” regularly.  The statement was made off-the-record.

Foreign and trade policy thus impacts manufactured housing, in very direct ways.

Imported Housing? Foreign Capital, and More?

Sources foreign and domestic tell MHProNews that some entire units – HUD Code, PreFab and modular – are also being brought into the U.S.

PoliceICEImmigrationCustomEnforcementYahooDailyBusinessNewsMHProNews

Click the image above to read the ICE raids MH producers report.

The recently reported I.C.E. raids in manufactured housing industry production centers should make it clear that raw or finished goods are not all that comes into the factory-built housing’s industry mix.

As the Daily Business News reported, capital that has fueled some of the acquisitions, notably in the manufactured home community sector, are also coming in.

YES_Communities__their_credit postedDailyBusinessNewsMHProNews

Singapore based GIC invested 2 billion dollars in U.S. based Yes! Communities, to learn more, click the photo from Yes! Communities, above. </>

But there are numerous other indications that foreign capital also is involved in U.S. manufactured housing production too.

TrendingBigMoneyOperationsLikeLegal+GeneralInvestingCavcoUSBusinessesDailyBusinessNewsMHProNews

America First

The trend of imported labor, raw, and finished goods being used in HUD Code manufactured housing’s production is not new.  It has been taking place for decades. Some argue that it is occurring at an accelerated rate, under both Democratic and Republican administrations.

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So when President Trump upended the Washington D.C. “Establishment” in last November’s presidential election, his trade and other policies weren’t just a hypothetical for manufactured housing.

IWillLowerTaxesEliminateUnnecesaryRegulationUnleashAmercianEnergyPlacingAMericanBusienssandWorkersFirst-DOnalTrumpNationViewsMHProNews

President Trump and VP Mike Pence have both said they will be in the promise keeping business.

Or as the Manufactured Housing Association for Regulatory Reform’s president and CEO, Mark Weiss put it recently in a column in MHProNews, For Manufactured Housing, The Obama Administration Never Left Town.” ## (News, analysis.)

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Major Moves at Tricon Capital Group

April 14th, 2017 Comments off
MajorMovesatTriconCapitalGroupcreditCBSLocal-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: CBS Local.

Big news for Tricon Capital Group Inc. (TCN), as they have announced their acquisition of Silver Bay Realty Trust Corp (NYSE:SBY), an owner and operator of single-family rental homes in the United States for $1.4B.

According to HousingWire, the all cash transaction valued Silver Bay at $21.50 per share, and the deal will create the country’s 4th largest publicly owned single-family rental operator with over 16,800 units nationwide.

The proposed acquisition of Silver Bay is an incredibly exciting and transformational event for Tricon. This acquisition will more than double the size of Tricon American Homes, establishing it as the fourth largest publicly-owned SFR company in the U.S. Silver Bay’s high-quality and well managed portfolio of SFR homes is a natural complement to our TAH assets, in particular given the geographic overlap in the Sun Belt,” said Tricon President and CEO Gary Berman.

InsideTriconCapitalGroupsRecentMovescreditTriconCapital-postedtothedailybusinessnewsmhpronewsmhlivingnews

Gary Berman. Credit: Tricon Capital.

We believe that the transaction will result in significant operating and overhead synergies creating immediate value for our shareholders. In conjunction with the Acquisition, we also intend to exit our smaller non-core businesses and take a meaningful step toward simplifying our overall corporate business model by focusing on scale, industry leadership, enhanced disclosure and operational integration across our investment verticals.”

The newly combined company will operate in a total of 18 markets, including six markets with one thousand homes or more.

We have continually evaluated the most prudent way to drive sustainable, long-term capital appreciation and we believe this transaction is the best opportunity to return maximum value to our stockholders,” said Silver Bay CEO Thomas Brock.

Over the past year, we have been making excellent strides in driving efficiency across our operating platform. We closed out the year with the best quarter in our company’s history, which I credit to the dedication and focus of our Silver Bay team.

Our well-crafted portfolio of single family properties and the recent strong performance across our platform will serve as a great complement to Tricon Capital Group Inc.’s business as the single family rental industry continues to evolve and consolidate.”

The deal is expected to close by end of Q2 2017.

MajorMovesatTriconCapitalGroupcreditBLoomberg-postedtothedailybusinessnewsmhpronewsmhlivingnews

Tricon 1 year look. Credit: Bloomberg.

Insider Action

Tricon Capital Group Director Ira Gluskin purchased 50,000 shares of the company’s stock last month, at an average price of C$10.72 ($8.05 USD) per share for a total transaction of C$536,000.00 ($402,482 USD).

The company has received an overall “buy” rating consensus from analysts, including CIBC, BMO Capital Markets, TD Securities, and Royal Bank of Canada.

Tricon Capital Group is a principal investor and asset manager focused on the residential real estate industry in North America with approximately $3.1 billion USD of assets under management. Tricon owns, or manages on behalf of third party investors, a portfolio of investments in land and homebuilding assets, single-family rental homes, manufactured housing communities and multi-family development projects.

For the most recent closing numbers on Tricon Capital Group – and all MH industry-connected tracked stocks – please click here. ##

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.