In the world-changing month of March 2020, a major real estate transaction slipped under the Memphis media’s radar.
An Atlanta-based real estate investment firm, The Prager Group, purchased, for $31.2 million, 435 homes from Cerberus Capital Management — the massive private equity firm that a Washington Post investigation described as aggressive with evictions and prolific in its code violations.
Residents of those homes say Prager is a far worse landlord.
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From no heat in the winter to major leaks soaking carpets for months on end, almost every Prager tenant MLK50 contacted described deep frustration with the company, saying it doesn’t maintain its homes as well as their prior landlord.
“When you called (Cerberus), they would go ahead and send somebody out,” said Demareo Grandberry, a Westwood resident who lives with his girlfriend and their six kids. “With these folks, our heater wasn’t working at one point in time and it took them three months to come (fix) that.”
Prager representatives in Atlanta and Memphis did not respond to multiple calls and emails from MLK50: Justice through Journalism. The company’s property management website says that it “has established a reputation for providing homes with exceptional service.”
Left in the cold
Some nights last winter, April Chambers would send her four children to stay with friends and family — a decision that made her feel guilty, even though she knew it was best.
“You feel like you’re not doing what you’re supposed to be doing when you have to put your kids off on somebody,” Chambers said. “They should be here in a nice, warm, stable home, and I wasn’t able to give them that.”
To provide that stable home, Chambers was working seven nights a week at Richardson International’s cooking oil factory just south of Central Gardens and regularly paying her $750 per month rent on a Raleigh home Prager owns.
In mid-November 2020, a fuse blew, cutting off electricity to half of her home — including the furnace. The first person Prager sent replaced the fuse, but it quickly blew again. The second person Prager sent told Chambers the house’s electrical system was in a “very dangerous” condition that would require major work to repair. He also advised her to call code enforcement, but Chambers worried the city would shut off the rest of her power if she did.
Until she moved in mid-January, Chambers and her children simply made do. On the nights the kids did sleep in the cold house, they slept in a single room — buried in blankets and counting on space heaters for warmth.
Five of the seven Prager tenants MLK50 reached — largely by door-knocking — had at least one example of the company failing to fix a major issue and six said the company was slow to respond to maintenance requests, if it responded at all. One renter did speak highly of the company, saying its maintenance men usually show up within a day or two of him submitting a request.
Broken heating systems and leaky roofs — expensive repairs — were the most common issues renters reported Prager not fixing.
A current Prager tenant — who declined to give her name for fear of eviction — said her roof is in such bad shape that water soaks the carpeting in her sunroom during rainy weeks. Since the company has failed to fix this and other major issues over the last year and a half, she said she’s given up on submitting maintenance requests.
“Prager just doesn’t respond. Period,” she said.
When Cerberus owned her home, the same woman said its maintenance team fixed her air conditioner quickly when it broke.
At Grandberry’s rental home, some of the other issues they’ve encountered since the Prager Group took over management include (left) an unfinished cabinet and counter repair after an unresolved plumbing issue led to a mold and mildew; (top right) multiple requests about a bullet hole on their daughter’s bedroom door and wall from a stray bullet; and (bottom right) shower lining installed with an adhesive that started separating quickly. Photos by Andrea Morales for MLK50
The homes Cerberus sold Prager are largely in low-income areas such as Frayser, Westwood and Oakhaven and were mainly the cheaper homes Cerberus owned. The average Memphis home that Cerberus still owns is worth about $145,000, while the average Prager-owned home is worth about $85,000, according to an analysis by the Shelby County Assessor of Property.
In the 18 months after the sale, 379 requests for help from the City of Memphis for things like sewage backups, broken heaters and blighted property — including seven that warranted emergency priority — were filed about the homes Prager purchased, according to the city’s data. In the 18 months prior to the sale, 349 complaints were filed for those addresses, with none rising to the level of an emergency.
‘A mop bucket … to flush the toilet’
In August, Stacey Glapion’s air conditioning failed in the sweltering heat, and nobody at Prager would return her calls.
Within days, she and her son began feeling lethargic and ill. Because she has an autoimmune disease, her doctor told her to check herself into the hospital, so her body could cool down.
“My temperature was elevated; my blood pressure was elevated,” Glapion said. “My doctor put it blankly: ‘You could have died.’”
After leaving a local hospital, Glapion still hadn’t heard from her landlord, so she purchased window units, which have proven a worthwhile investment. Speaking to MLK50 more than three months after the incident, she said her Frayser home’s central air-conditioning system was still broken.
While “the air situation,” as she calls it, has been the worst issue with Glapion’s home, it’s far from the only one. The electrical outlets in her kitchen haven’t worked for more than a year, there’s been a large hole in her roof for 10 months and her home’s single toilet stopped working in May.
“You have to fill up a mop bucket and pour it into the tank to be able to flush the toilet,” she said.
Through all of these frustrations, Glapion said she’s succeeded in getting a Prager-hired handyperson to her house twice — for the toilet and electrical outlets — and both workers failed to fix the problems. Beyond those visits, she said the Atlanta firm has largely been unresponsive to calls and emails.
Two of the renters MLK50 spoke with declined to speak on the record because they worried eviction would follow and they’d have nowhere else to go.
The Memphis area’s vacancy rate for apartments has plummeted from more than 12% at the end of 2019 to a 10-year-low of 9% in the third quarter of 2021, according to CoStar Group and ARA Newmark. And rental rates are rising quickly at the homes and apartments that are available.
Grandberry said he only gets Prager’s attention by either withholding rent — a measure that can end in eviction — or refusing to sign a new lease until repairs are made.
When he originally reported a tree in his backyard leaning toward his house, Prager told him they weren’t going to remove it, but a threat to withhold rent convinced the company to have it cut. And, when a company representative asked him to renew his lease recently, Grandberry told her he’d rather move if the company wouldn’t come fix his leaking kitchen sink and messed up flooring. It quickly made the repairs.
Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com
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