ELS Announces $1.43B Purchase of 76 MH Communities
Chicago-based Equity LifeStyle Properties Inc. (ELS) announced May 31 it had entered into purchase and other agreements with certain affiliates of Hometown America LLC to acquire a portfolio of 76 manufactured home communities containing 31,167 sites on approximately 6,500 acres located in 16 states.
The stated purchase price: $1.43 billion.
The sale also includes certain manufactured homes and loans secured by manufactured homes located at the Hometown Properties.
ELS, a major player in the RV park and campground business through its affiliated Encore properties, anticipates that the acquisition will be funded through:
- The net proceeds from a public offering of common stock.
- The assumption by ELS of approximately $524.3 million of fixed-rate, non- recourse mortgage indebtedness (as of March 31, 2011) secured by 34 properties in the Hometown Portfolio with a weighted average interest rate of approximately 5.63% per annum and a weighted average maturity of approximately 6.0 years.
- The issuance by ELS to Hometown of 1.7 million shares of common stock and 1.74 million shares of Series B Subordinated Non-Voting Cumulative Redeemable Preferred Stock, which have a stipulated aggregate value of $200 million in the purchase agreements.
- Approximately $300 million of debt capital through an anticipated 10-year secured financing that the company plans to raise after completion of a public offering of common stock.
- Approximately $200 million of debt capital through an anticipated six-year unsecured term loan that the company plans to raise after completion of a public offering of common stock.
Prior to the announcement, ELS owned and managed, or had a controlling interest in more than 300 communities with more than 110,000 sites. Founded more than 30 years ago, the real estate investment trust has been a publicly traded company since 1993.