Pangea Properties Turns Its Muscle
In addition to its high profile, Pangea has a unique business model. As a private REIT, it is not legally required to disclose income or profits. Instead, each building is a shell LLC with geological or geographic names and alphanumeric titles such as “PP P7 3.”
It’s an effective way to manage a real estate portfolio in major cities like Chicago, Indianapolis and Baltimore.
To invest
In its early years, Pangea Properties (also known as Pangea Real Estate, Pangea Ventures and others) presented itself as a modern, innovative company that would buy and manage apartment buildings through directly without middle managers, using “data and analytics.” to analyze employers and triage care. The company grew rapidly. It made the Forbes list of “America’s Most Promising Companies” and the annual list of an annual Inc. 500 list of America’s fastest-growing companies; launched a leading asset management firm and financial services business, making loans to homeowners; and investing heavily in community development and efforts some local.
Goldstein and Martay say they have invested more than $400 million in Chicago properties. They also pointed out that it is unfair to compare Pangea’s eviction numbers with those of the other filers above, because they are proprietary and do not use third-party asset management agencies. But they couldn’t deny that their buildings were responsible for a large portion of the evictions in South Shore, Chatham and Auburn Gresham.
To rent
In addition to a high-tech website and other automations, Pangea Properties focuses on attracting tenants by building appealing buildings and providing services such as new appliances. . It also has a charitable foundation that provides neighborhood beautification, school bag giveaways, food drives and training programs.
However, the Reader has heard from several longtime residents who have complained about Pangea’s collection practices. One tenant told the Reader that he was forced out of his building when he couldn’t make full payments and feared eviction.
Goldstein declined to comment on the specifics of the case, but said Pangea is careful not to evict people unless they are behind on their rent or have violated the terms of their lease. He says that he does not believe that the rate of dismissal in the company is particularly high and he notes that most of those cases end in a settlement between Pangea and the employer. He added that Pangea does more than any other homeowner in Chicago to receive housing vouchers and other government assistance.
Maintenance
On a hot spring morning last year, sheriff’s deputies gathered at a warehouse south of Coles Avenue to carry out the eviction of 76 people. The 60649 zip code, which contains many Pangea buildings, is has the highest eviction rates in Cook County.
A few blocks down the street, Chawanya Hayes and her roommates were coming out of their apartment in another Pangea building. They said that they have been paying rent for two years but they have never received a response to their maintenance requests and heard the sound of gunfire from the valley outside.
The Metropolitan Tenants Organisation, which runs a helpline, receives more calls about Pangea than landlords. Tenants complain of mold, rodents, and lack of maintenance, but also unexpected fees. Another example is water rates, which are calculated based on the square footage of the building rather than per tenant usage. They can add up to $30 or $40 a month. Pangea says the rates are in the lease. However, supporters say the company often overcharges and makes mistakes.
Advertising
The company is not a public REIT, so it is not legally required to disclose its expenses and profits. But investors are known to include Wall Street funds and West Coast venture capitalists. Local financiers also contributed, including legends like Norman Bobins and Jim Reynolds.
But Pangea has always been the most popular landlord in town. The company’s evictions increased in its first years of operation, court records show. The company filed more lawsuits than other landlords in Chicago’s most troubled neighborhoods, even companies with larger portfolios of rental properties.
Residents of Pangea buildings complain that the company’s collection practices are aggressive. A woman who lives in the Pangea building said that she and her boyfriend would bring the company’s rent with a small amount because they could not afford to pay it all, even though they knew that doing so will put them at risk of deportation. Pangea’s owner, Goldstein, denied this. He told the Reader in an interview last summer that Pangea was a “good guy” who was driving neighborhood revitalization by investing in low-income communities.