Joint Venture Set to Revive North Shore MHC

CHICAGO—The manufactured housing sector has been gaining momentum recently, and Glenview MHC, a joint venture between three Chicago-based real estate firms, is set to begin renovating one of the best-located MHC developments in the US. Although most MHC communities are located in peripheral areas, Sunset Village sits at 2450 Waukegan Rd. in Glenview, and provides hundreds of low-cost homes in the heart of the affluent North Shore.

“Everyone in the manufactured housing business knows about Sunset Village,” David Worth, principal at Ravinia Communities LLC, tells GlobeSt.com. Along with the Wolcott Group LLC and JDI Realty LLC, Ravinia acquired the 30-acre site out of foreclosure in 2013 after the “previous owner ran into trouble with his portfolio.”

When the recession hit, the owner Richard Klarchek had been in the midst of upgrading the housing stock, but also used the new homes as collateral for other loans which went sour. Many homes were removed and occupancy plunged below 40% as the community's infrastructure fell apart.

“Things hit rock bottom,” Worth adds, and both municipal officials and the remaining residents were upset by the deterioration. But after the new owners complete a $9.0 million capital improvement campaign, “we will essentially have a brand new manufactured housing community in an amazing location.”

Ravinia specializes in acquiring and repositioning manufactured housing communities, but when it first looked into acquiring Sunset Village, Worth was worried that after all of the problems that had plagued it, the Village of Glenview might prefer to get rid of the mobile homes and start over. “But from the very beginning, Glenview officials viewed the existing residents as part of their constituency. There was never any interest in removal.”

Over the next several months, Glenview MHC will replace the property's water and sewer infrastructure, install all new roads, upgrade the community's street lights and add new homes. Furthermore, the community's residents will soon get connected to Glenview's water system and abandon the existing well water system that was plagued with service issues for years. The partners will complete the project by late 2015.

Glenview MHC has already made several improvements to the property including a comprehensive rehab of the community clubhouse, the addition of a brand new fitness center and landscaping improvements along Waukegan Rd. Since the acquisition, occupancy has increased from 145 units to about 190. And after it completes the infrastructure project, the joint venture plans to add up to 170 new homes to the community.

The joint venture has been an active manufactured housing community buyer throughout the US in recent years. In addition to Sunset Village, its current manufactured home portfolio includes communities in Milwaukee, Columbus, St. Louis and Louisville.

Built in 1951, the average home at Sunset Village has about 1,250 square feet of space with three bedrooms and two bathrooms. “Comparable rental housing within two miles costs about $3000 a month,” says Worth. “We can offer homes that cost half as much.”

“Opportunities to recreate a community – really from the ground up – don't come along very often,” says Ari Golson, principal of the Wolcott Group. “Though the project was not without risk, the reward makes it well worth it. Sunset Village is back. ”