Sun Communities Inc. Buys 10 More RV Parks
Sun Communities Inc. announced today (Feb. 13) that on Feb. 8 it acquired 10 recreational vehicle communities located in the Eastern U.S. for $111.47 million.
According to a news release from the Southfield, Mich.-based owner of RV parks and manufactured housing communities, the newly purchased properties and associated intangibles are from:
- 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.
- Wild Acres LLC.
In connection with this transaction, the company also purchased certain cottages and homes located in the communities for an additional $1,321,750.
The acquired communities, three of which are located in Maine, two of which are located in Virginia and the other communities are located in Connecticut, Massachusetts, New Jersey, Ohio and Wisconsin, are comprised of nearly 3,700 sites of which approximately 40% are filled with recreational vehicles under annual rental contracts.
"While currently under-managed and in need of immediate capital improvements, these 'Class A' locations afford us a unique opportunity to enhance long-term growth through application of our existing management expertise, superior reservation systems and marketing programs and provide us entry into a new geographic footprint," said Gary A. Shiffman, chairman and CEO. "The acquired portfolio provides economies of scale and cross marketing opportunities from North to South when combined with our current recreational vehicle holdings, and tempers seasonality of our revenues as the majority of these communities have seasons that run from May – September rather than the traditional October – April."
Bank Borrowings Increase
The company also announced that on Feb. 6, it borrowed $61.5 million from Bank of Montreal, as lender and administrative agent, secured by first priority liens on all of the company's equity interests in certain of its subsidiaries that directly or indirectly own 20 manufactured home or recreational vehicle communities. This debt currently bears interest at LIBOR plus 1.50% and matures on Aug. 6, 2013 but, at the company's election, the maturity date may be extended for an additional six months upon compliance with certain conditions.
Inclusive of the acquisitions announced above, the company expects that its Funds from Operations will be in the range of $3.45 – $3.55 per diluted share and OP unit for the year ending Dec. 31, 2013. Additional information and assumptions underlying this guidance will be further detailed in the upcoming fourth quarter 2012 earnings release.
Sun Communities Inc. is a REIT that currently owns and operates a portfolio of 183 communities comprising approximately 67,381 developed sites.