Liquidation of 460 Miell rentals not likely to hurt Cedar Rapids market

A raft of rental properties that will soon go on sale because of the liquidation of Robert Miell's business isn't likely to swamp the Cedar Rapids real estate market, experts say.

Miell placed about 460 rental properties under bankruptcy protection in May, hoping to prevent lenders from foreclosing while he reorganized. Most are single-family homes.

After Bankruptcy Judge Paul Kilburg converted Miells bankruptcy to a Chapter 7 liquidation last week, the properties will soon be going back to 14 banks and credit unions that financed them.

The banks probably will sell the properties quickly, said Darin Garman, rental property specialist at NAI/Iowa Realty Commercial.

Interest in the sales is already bubbling, Garman said.

“I've had four people call and say, ‘When are the Miell properties coming online?' ” Garman said.

That interest results from the expectation that the properties will sell below market value, Garman said. Many of the properties have deferred maintenance and are not currently leased.

Miell, facing sentencing on federal tax and mail fraud charges, tried but failed to sell 300 of the properties for $42 million last year on www.loopnet.com Garman said the asking price was too high.

Marylne Miller of Skogman Realty Commercial, who also specializes in investment properties, agrees that the market can absorb all the properties. “They're going to be snapped up,” she said.

First-time homebuyers and residents who lost their own homes in last year's flood are likely to show interest along with property investors, she said.

The largest of Miell's properties is 32 units, Garman said, which is not large by apartment complex standards. “Otherwise, it's a 12-plex here, a four-plex there.”

New owners will have to bring the properties up to code to get permits needed to rent them, said Landlords of Linn County President Keith Smith.

He said they may appeal as rentals to families displaced by the flood who are now renting apartments but would like to get back into a house as renters.

Overall, it will be a plus for the real estate market. he said.

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Miell's real estate property empire to be liquidated (gazetteonline.com)