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March 05, 2015

Billionaire Found With 'Four Seasons' Mobile Home Park in Alaska

Bloomberg Business

Caleb Melby

Just south of the Elmendorf-Richardson military base in Anchorage, Alaska, there's a seven-block mobile home park named Four Seasons, where rentals start at $1,300 a month.

It's one of at least 40 multifamily properties in the area, or about 12 percent of the city's entire rental market, owned by Weidner Investment Services Inc.

"They're the 800-pound gorilla in town," Kim Johnson, a real estate agent with Paragon Properties Inc., said in a phone interview. The 4,000 apartments are a fraction of the more than 38,000 units the company owns in Seattle, Phoenix, Colorado, Texas, Canada's Alberta and Saskatchewan provinces, and other markets. Together, the properties have a net asset value of $2.3 billion, according to data compiled by Bloomberg, making the company's 72-year-old founder W. Dean Weidner a billionaire.

Greg Cerbana, a spokesman for Weidner Apartment Homes, declined to comment. Andrew Kinstler, a partner at law firm Helsell Fetterman in Seattle, said in a phone call that Weidner didn't want to be featured in an article.

"They suck up all the big stuff that my other clients would like to buy, usually in a private sale before it hits the market," Dan Benton, an Anchorage real estate agent, said in a phone interview.

Off of Highway 1 in Anchorage, there's the U-shaped slat-boarded four-story buildings named Alpine Apartments and a gated luxury development called the Highlands. Rancho Tudor and College View, separated by a parking lot, are near the University of Alaska at Anchorage, where Weidner has pledged at least $4 million to the business and public policy college.

First Property

Further south along Alaska's coastline, the company owns a brown 12-story in Juneau. It's called Mendenhall Towers, named for a nearby mountain formation, and is the state capital's tallest building.

Weidner's mother began teaching him how to maintain and manage his family's duplex and fourplex apartments in Colorado Springs when he was 14 years old, according to a 2002 profile in Alaska Business Monthly. He continued to manage them through college, according to the article.

He bought his first property in Seattle in 1977, Weidner said in an October 2013 talk at University of Wisconsin-Stout, where he donated $1 million to the business school. At the time, he was an assistant vice president at Alaska Airlines Inc., according to his LinkedIn page.

Seattle Rents

He became an executive vice president at Travalaska Tours in 1980, according to the LinkedIn profile. He bought his first Anchorage rental properties, with 290 units, in 1981, according to the Alaska Monthly article. He stopped working at Travalaska in 1984, according to LinkedIn.

His Kirkland, Washington-based company now owns at least 40 buildings with more than 6,100 units in Seattle and surrounding towns such as Bellevue, Kirkland, Renton and Everett, according to data compiled by Bloomberg. Rents in Seattle are up 6.4 percent over last year as of January, data compiled by real estate website Trulia Inc. show.

"They recognize the opportunity in small markets," said Gary Klockenteger, senior vice-president of valuation advisory at Kidder Mathews in Seattle.

The company invests $400 million annually, adding 4,000 units a year, and Weidner reviews 20 to 30 purchase opportunities with his acquisitions team a week, according to an official university write-up of the conversation at Wisconsin-Stout. It's the 30th-largest owner of rental properties in the U.S, according to the National Multifamily Housing Council.

Tucson, Peoria

Some of the assets the company lists on its website are owned by limited liability corporations named after the properties or their addresses, according to public records. The records are filed under Weidner's name.

"While we continue to acquire and build new communities, we rarely sell our properties providing consistency, and continuity for the long term," the company's website says. Weidner owns more than 30 properties in Arizona, with at least 9,900 units, valued at about $1 billion before accounting for debt, according to data compiled by Bloomberg. Half are in Phoenix, where rents are up 10 percent year-over-year, according to Trulia. Others are located in Tucson, Anthem, Mesa, Chandler and Peoria, according to the website. Most of the Arizona properties were purchased in 2010 or later. The company has also invested in U.S. and Canadian housing markets where the shale oil boom created new jobs, and where falling oil prices now weigh on the local economies.

'Big Player'

It owns at least 18 properties with more than 2,900 units in Midland and Odessa, Texas, towns west of Dallas in the oil-rich Permian Basin region, where the number of operating drilling rigs has dropped with oil prices, according to Bloomberg Intelligence reports.

In Midland, Texas, Weidner is a "big player," said Scott L. Williams, whose Scott Williams Team Realtors owns about 350 apartment units in the area. The number of available rentals has increased in Midland as oil prices have fallen, and vacancies are taking longer to fill, even with rent discounts, Williams said in a phone interview. Rents had increased by about 60 percent over three years prior to the oil price drop, he said. Falling oil prices have affected cities in Alberta and Saskatchewan, Canada, where the company owns at least 40 buildings. Royal Bank of Canada expects home resales to fall by 15.7 percent and 8.6 percent in those markets.

In Calgary, the drop in oil prices and softening demand for homeownership has increased demand for rental properties, according to Mainstreet Equity Corp. Alberta was the fastest growing province for rental revenue in the quarter ended Dec. 31, according to the Calgary-based property manager.

In Colorado Springs, where the company owns at least 18 buildings with about 2,600 units, oil also has played a role: the city's 93 percent vacancy rate is weaker than other markets Weidner operates in. "They look for opportunity that most people would step right by," Klockenteger said.

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