PRZOOM - /newswire/ -
Scottsdale, AZ, United States, 2014/07/15 - After many unsuccessful attempts to negotiate with ARPI, Invision Capital Management has filed multi-million dollar claims including unjust enrichment, breach of contract and fraud over properties it jointly acquired with ARPI.
Invision Capital Management has filed multiple claims in Maricopa County Court against national REIT company American Residential Properties, Inc. (ARPI) after attempts completely failed to get ARPI to pay rehab costs, acquisition costs and equity interests due to Invision.
Invision Capital Management is a local property investment and management company based in Phoenix, Arizona that began jointly developing a portfolio of affordable, entry-level housing in 2010. American Residential Properties (now a public company) is a sizeable REIT seeking to grow its portfolio of rental properties. It committed to partner with Invision Capital to jointly build a portfolio of properties in the Phoenix, Indianapolis and Las Vegas markets.
The complaints detail how ARPI committed to a combined portfolio of $40 Million to acquire and rehab properties through Invision and began with a first injection of capital in 2012. By the summer of 2013, Invision acquired a total of 550 properties in the Phoenix, Indianapolis and Las Vegas markets worth an estimated $28 million. Invision remediated the properties and began leasing with revenues going to ARPI in what is commonly called a triple net lease. This was a successful venture for a period of time until ARPI decided to stop funding the acquisitions and the rehab costs. As a result, ARPI eventually defaulted Invision and took over those portfolios based on a lack of enough tenant revenue to pay ARPI the required rent under the triple net lease arrangement. The complaint claims that this was specifically a result of a lack of initial funding by ARPI to rehab the properties and get them stabilized in order to create enough rent for Invision to remain current on the master lease agreements.
As a result, Invision Capital Management was forced to file a lawsuit against ARPI after multiple attempts to get the rehab expenses reimbursed by ARPI. In addition to a claim for rehab reimbursement, Invision filed eight other claims including, but not limited to, unjust enrichment, breach of contract and fraud.
To date ARPI has not tried to reconcile its failure to pay the costs of rehab, which total over $450,000, and represents just one of the multiple claims filed by Invision which total more than $8,000, 000. By under-funding its commitment to Invision, ARPI was able to squeeze them out and take over the portfolios and the corresponding profits interest of Invision in the assets. ARPI has also done this with other third party partners such as Landsmith.
ARPI did settle their dispute with Landsmith for an undisclosed amount. In its last quarter, ARPI publicly reported revenues increased 32% to $17.5 million up from $13.2 million in the Q4 of 2013, with assets now exceeding $1 billion. ARPI also failed to publicly disclose to its shareholders or the SEC in that report that it has a lawsuit on the books with Invision Capital.
About Invision Capital Management
Invision Capital Management (invisioncapitalfunds.com) is a private Phoenix-based property investment and management company that acquires and then rehabilitates affordable, entry-level housing in select US markets. The Company manages a portfolio of properties that it has been growing since 2010.