Sun Communities Buys 11 Morgan RV Resorts
On Dec. 9, Sun Communities Operating Limited Partnership (SCOLP), the primary operating subsidiary of Sun Communities Inc. and newly formed wholly owned subsidiaries of SCOLP entered into an agreement to purchase 11 Morgan RV resorts for $135 million, according to a filing with the Securities and Exchange Commission.
The agreement was with Robert C. Morgan, Robert Moser, Ideal Private Resorts LLC and Morgan Fiesta Key, LLC, Gwynns Island RV Resort LLC, Indian Creek RV Resort LLC, Lake Laurie RV Resort LLC, Newpoint RV Resort LLC, Peters Pond RV Resort Inc., Seaport LLC, Virginia Tent LLC, Wagon Wheel Maine LLC, Westward Ho RV Resort LLC and Wild Acres LLC.
Concurrently with the execution of the agreement, SCOLP and newly formed wholly owned subsidiaries of SCOLP entered into an agreement with Indian Creek RV Resort LLC, Lake Laurie RV Resort LLC, Wagon Wheel Maine LLC and Wild Acres LLC pursuant to which the four contributors will contribute four recreational vehicle communities and all associated assets to newly formed wholly owned subsidiaries of SCOLP; and an agreement with Morgan Fiesta Key, LLC, Gwynns Island RV Resort LLC, Newpoint RV Resort LLC, Peters Pond RV Resort Inc., Seaport LLC, Virginia Tent LLC and Westward Ho RV Resort LLC pursuant to which the seven contributors will contribute seven recreational vehicle communities and all associated assets to newly formed wholly owned subsidiaries of SCOLP.
The aggregate purchase price under the agreements is $135 million, subject to certain adjustments, which will be paid by cash to pay off all existing secured debt and the balance will be paid in a combination of cash and up to $10 million of newly created Series A-3 Preferred OP Units of SCOLP, as determined by the Contributors prior to closing.
The closing of this acquisition is subject to the satisfaction of customary closing conditions, including SCOLP’s receipt of clear title to the communities. A third-party has recorded a “Memorandum of Agreement for an Option to Acquire the Properties” against some or all of the communities and such encumbrance will need to be resolved to SCOLP’s satisfaction prior to the closing.
Under certain circumstances prior to the closing, SCOLP or its subsidiary may loan the contributors up to $74.5 million to refinance the existing secured debt on five of the communities (and one additional recreational vehicle community owned by affiliates of the contributors), in which event SCOLP would become the senior secured lender on all of such communities.