Search for profits

The Journal-Constitution’s examination found that nearly 70% of the complexes on its list are controlled by out-of-state companies, from New York, Florida, Utah, Canada and elsewhere. Some are owned by companies tied to investment giants and private equity firms with hundreds of billions of dollars worth of assets under management, though their identities are often concealed behind anonymous limited liability companies, middlemen and subsidiaries.

As the metro area’s dire shortage of affordable housing worsens, those investors have been snatching up aging complexes where lower-wage families live. Of the 272 complexes the Journal-Constitution identified, 189 were built in the 1950s, ‘60s and ‘70s.

The investors’ business model: Raise rents and tightly manage operations to raise profits, then sell.

But older complexes are often plagued by high maintenance costs and need far more than cosmetic changes. Plumbing, heating and other major systems may need overhauls for which investors may not want to pay, said Schilling.

Credit: JOHN SPINK / AJC

Police inspect the scene of a homicide at Appletree Townhomes in February 2022. The complex is owned by a company tied to New York-based Tusk Equity Partners, which in recent years has held seven of the metro area’s most dangerous properties through affiliated companies. (John Spink / John.Spink@ajc.com)

“They’re looking at it as an investment in real estate speculation. They’re looking at it from, ‘What’s my rate of return? Let me minimize the amount of cash that I need to maintain it,’ ” Schilling said.

Canadian firm Frankforter Group, which has been tied to at least three area complexes with chronic gun violence, advertises average returns at 23%, which it achieves by “maximizing rental rates” and “rigorous operational controls to manage and reduce costs,” its website states.

Frankforter’s CEO declined an interview request through an assistant, but an attorney sent a statement on behalf of one of the company’s Atlanta holdings, a property where a 9-year-old boy died in a shooting in February: “We are proud of our commitment and ongoing efforts to work alongside city officials to provide an elevated standard of affordable housing to residents of Atlanta.”

Salt Lake City-based Bridge Investment Group, which since 2019 has acquired four suburban properties with crime and other problems, posted a 37% return on its workforce and affordable housing fund last summer. Fundraising for a new round of investments recently raised $1.74 billion, well ahead of its $1.50 billion target.

A Bridge spokeswoman said the company is focusing on apartment safety and that many of the violent crimes and other issues found by the Journal-Constitution took place before it acquired the properties. They are “only a fraction of our portfolio in the Atlanta region,” she added.

‘War zone’

Tusk Equity Partners, the New York firm which owned The Park at Greenbriar complex when Hinton signed her lease, in recent years has held seven of the metro area’s chronically dangerous properties through affiliated companies. Specializing in what it calls “innovative operations and cost-effective management,” its website boasts 25,000 residents in complexes across Alabama, Georgia and South Carolina, though the site reveals nothing about its leadership, and it discloses few details in public filings.

Court documents from lawsuits against the complex fill in some of the blanks.

Tusk principal Moshe Horn acquired The Park at Greenbriar in 2018, a few months before his 30th birthday, and used third-party companies to run on-site operations.

Horn could fly to Atlanta in the morning to visit Tusk’s complexes and be back in in New York in the evening in time to see his children, he testified. He kept tabs on The Park and other properties through phone calls several times a day, including weekends, with a top executive at its management company.

Credit: JOHN SPINK / AJC

A firefighter helps a resident remove belongings from his burned out home at The Park on Windy Hill Apartments in January 2021. Salt Lake City-based Bridge Investment Group acquired this Marietta complex and three other suburban Atlanta properties since 2019 that the Journal-Constitution found to be persistently dangerous. (John Spink / John.Spink@ajc.com)

Business was good. Occupancy rates stood at 98% at the Greenbriar apartment, and monthly rent collections topped $700,000. More than a dozen investors signed on with his company to share in the complex’s profits, Horn testified.

Yet graffiti covered the The Park’s buildings, burned-out units went unrepaired and its security cameras were broken. A deputy sheriff who patrolled the complex in exchange for reduced rent said that he moved out, fearing for his life, after a man was shot dead in August 2019 near his front door. He testified that an apartment manager told him the budget had no room for security guards.

That summer marked the beginning of a five-month string of violence during which apartments were sprayed with gunfire, a tenant was robbed by two armed men, a different tenant reported her children were held at gunpoint, a maintenance supervisor was threatened with a gun, a visitor suffered a gunshot wound to the face, another visitor was shot in the parking lot while waiting for an Uber, and still another visitor was shot while walking to Greenbriar Mall to meet up with his mother.

A leasing office worker warned her supervisors in three separate written reports that police wanted the complex to improve security. She typed the same sentence each time:

They consider this property a “WAR ZONE.”

Still, Horn testified he heard nothing of this violence until a series of lawsuits were filed by the survivors of the victim of the August 2019 shooting and two others wounded in separate attacks.

Credit: ARVIN TEMKAR / AJC

Court documents reveal that in 2019, a deputy sheriff who patrolled The Park at Greenbriar complex in exchange for reduced rent feared for his life and moved out. Principal Moshe Horn of Tusk Equity Partners, which owned the property at the time, testified that he was not aware of the violence when it took place. Tusk sold the complex in 2021 and it is now called The Retreat at Greenbriar by ICER. (Arvin Temkar / Arvin.Temkar@ajc.com)

Even then, Horn expressed no urgency over adding security. Security patrols are more suitable for higher-end properties where tenants can afford to have the expense added onto their rents, he said. Installing a gate at the complex’s entrance could cost as much as 7% of its monthly rent collections, Horn testified, and gates often break or malfunction.

“I’ve paid way too much money to repair gates,” he groused.

In response to requests for comment left for Horn by the Journal-Constitution, an attorney for Tusk said to stop attempting to contact him.

Tusk sold The Park at Greenbriar in October 2021 to ICER Properties, a family-owned real estate company also from New York that hopes to acquire 10,000 apartment units in southern states, its website says. The new owner’s president told real estate trade publication Bisnow that it was entering the Georgia market to avoid “crazy regulations” in his home state.

Doors at the complex, now named The Retreat at Greenbriar by ICER, are painted a cheerful yellow, and new wood fencing surrounds the worn patios. But stormwater still runs calf-high during downpours, and trash overflows from the dumpsters, resident photos show. Tenants have recently complained of mold, holes or cracks in ceilings, roaches and a broken air conditioner, according to city code enforcement records.

In July, a man nicknamed “Maniac” fired a bullet that shattered a bystander’s patio window, a police report states. Two aggravated assaults have taken place since then, and there’s still no security gate.

ICER Properties’ president did not respond to phone or email messages asking for comment.

Headwinds

The Park at Greenbriar is among 43 complexes that the city of Atlanta identified this summer as having chronic crime and code enforcement problems. But the city’s list, released after the first installments of the Journal-Constitution’s Dangerous Dwellings investigation, did not include dozens of other complexes the newspaper identified as being as bad or worse, and officials acknowledged that their approach to monitoring them has been fragmented.

Like other local governments, Atlanta wasn’t combining information from police, code compliance, fire inspections and courts to identify chronically troubled properties.

As more have come to light through the Journal-Constitution’s investigation, local governments are being pushed to take tougher approaches. The detailed information the newspaper published on the 272 complexes could increase that pressure, advocates say, and bring accountability.

“Sometimes publicity may spur people into action,” said Bambie Hayes-Brown, president and CEO of Atlanta-based Georgia Advancing Communities Together, a statewide association of nonprofit housing groups.

Credit: JOHN SPINK / AJC

Residents of Orchard Walk in DeKalb County describe their escape from an overnight fire in February 2022. The website of the Frankforter Group, the Canadian firm that owned the complex at the time, proclaims average returns at 23%, which it achieves by "maximizing rental rates" and "rigorous operational controls to manage and reduce costs." (John Spink / John.Spink@ajc.com)

Cobb County commissioners passed an ordinance in September to require apartments to hire a third-party certified inspector to assess 25% of their units each year.

Sandy Springs’ city council, which instituted a program similar to Cobb County’s in 2007, is expected to vote in January on making its rules more stringent. Under the proposal, its 98 apartment complexes would have to have all units inspected yearly.

Gwinnett County leaders are discussing whether to create minimum standards for interior living conditions, said Commissioner Kirkland Carden. Currently, the county’s unincorporated areas have none, and code enforcement officers won’t inspect inside apartments.

“I do hear from my constituents,” Carden said. “I do see the press coverage, I see the videos, I see the pictures, I see the dwellings that they live in. And it’s subpar.”

At the Gold Dome, State Rep. Mesha Mainor, D-Atlanta, hopes that the attention will breathe new life into her proposal from the last legislative session to require apartment operators to post their crime statistics on their websites. The bill died after industry groups such as the Georgia Apartment Association opposed it and lawmakers pushed through amendments that would make local law enforcement shoulder the workload and costs.

“The people want it, but the industry does not,” Mainor said.

Georgia remains a solidly landlord-friendly state, said State Rep. Sharon Cooper, R-Marietta, chair of the Health and Human Services Committee. After winning a bruising 2019 battle for a new law to protect tenants who report code violations from landlord retaliation, she found her colleagues had little appetite to advance renter protections the following year.

All the recent attention to unlivable conditions, however, is a stark reminder of how many Georgians are suffering.

“It certainly is an issue that I think will be discussed,” Cooper said.