The potential buyers of a Lancaster County-based tiny-homes company are taking a new tack.
Chase Packaging Corp., a New Jersey-based shell company, had been planning to take Tiny Estates LLC and two related entities public through a merger.
The companies are led by CEO Abby Shank, a former KPMG auditor who started a tiny-home community outside Elizabethtown in 2018.
But the two sides mutually agreed that Tiny Estates and its tiny-home communities could benefit from private investment before going public, said Mark Nielson, a San Diego-based management consultant who is on the board of directors for Chase.
As a result, they allowed a non-binding indication of interest to lapse.
“Timing is super important on every deal, but particularly if you’re taking a company public,” Nielson said in an interview with biznewsPA. “We are still very excited about the management team and the industry, and we’re not looking for an entrée into the industry somewhere else. Our focus is on them.”
Shank referred questions to Nielson.
Why is this happening: Tiny Estates and its sister companies, Endeavor Tiny Homes LLC and Tiny Communities Fund LLC, need more time to prove their concept works, Nielson said.
They are creating tiny-home communities where people can buy and place homes either to live in or rent out.
In addition to the Elizabethtown area, the companies have a community in Marianna, Florida, in the panhandle section of the state.
“We felt, and they agreed, that it was best if we could move those parks along a little further in their development and then go out to the market further down the road,” Nielson said.
There are about 40 tiny-home sites available in Florida and 15 in Elizabethtown, which already has 55 filled, Nielson says.
Tiny Estates and its related entities derive revenue from land rentals and home sales, said Nielson, a former public company CFO.
Endeavor is a licensed dealer for tiny-home manufacturer Atomic Homes, which grew out of Lititz-based staging company Atomic Design.
What’s next: Nielson said he and other Chase board members are helping Tiny Estates find private investors interested in purchasing and renting out homes.
At an average cost of $120,000 per home, Nielson calculated the total investment would be around $6 million.
One of the incentives for investors is that they can write off 60% of the cost in the first year and then 10% a year for the next four, as long as the homes are not set in a foundation, Nielson said.
If investors show interest, it would reassure the public market, he added.
Chase board members are unlikely to invest themselves so as to avoid complicating a future deal, Nielson said. “But informally, we’re still very much involved and communicating regularly.”
They let the non-binding agreement lapse so that it would not complicate the picture for other investors.
The background: Chase was a specialty packaging company that ceased operations in the 1990s. It has been looking since then for a new operating business.
Chase’s board includes people with experience in manufactured housing and recreational vehicles, Nielson said. They see similarities — and opportunities for growth — in tiny homes.
A deal with Tiny Estates remains a priority, Nielson said. “We don’t have anything else that we’re focused on right now.”
