Carefree RV Resorts: An Acquisitive RV Park Operator
National RV Communities (NRVC), with 9,148 recreational vehicle sites owned and managed, ranks among the 10 largest owner/operators of RV properties in the U.S., according to the company. And NRVC, formed in 2005 to specialize in the acquisition, ownership and management of RV and MH communities, plans to add a lot more properties to its growing portfolio over the next few years.
The company operates the RV side of its business as “Carefree RV Resorts.”
NRVC owns and operates 39 RV properties in six states – Florida, Texas, New Jersey, California, Massachusetts and North Carolina, and one in Ontario, Canada.
NRVC is led by CEO David Napp and President Colleen Edwards, who previously co-founded Encore Communities Inc. Encore was acquired by Equity Lifestyle Properties in February 2004 in two separate transactions valued at more than $300 million.
NRVC is owned by its founders and key management team, as well as Five Arrows Realty Securities IV L.P.
A financially strong company, according to Edwards, NRVC boasts a wholly-owned property portfolio currently valued at around $270 million (excluding joint-venture assets) with a first mortgage debt of approximately $150 million.
”The company is well capitalized with sufficient equity to purchase the properties in its current pipeline, and to meet its 2010 acquisition goals,” Edwards said. “As of Sept. 30, 2009, NRVC has exceeded its year-to-date net operating income budget, and same-store revenues are approximately five percent greater than last year.”
”Our annual goals are to acquire between $75 million and $100 million in total a year,” added Napp.
Edwards said NRVC has a successful track record of accessing institutional capital and providing opportunities for significant operational and financial improvements in the communities it purchases. Geographically, NRVC primarily targets communities situated in destination locations offering exceptional activities and amenities, and in markets currently attracting the greatest concentrations of RVers, namely the Sunbelt states of Arizona, California, Florida and Texas, as well as states along the Eastern Seaboard.
Here’s a breakdown:
- Florida 7,071
- California 355
- Massachusetts 278
- North Carolina 92
- New Jersey 330
- Ontario 316
- Texas 706
- Total RV Sites: 9,148
NRVC points to several competitive advantages, including its strong marketing and branding programs, ongoing investment in properties, leverage of expertise, understanding of its customer, and emphasis on training.
”Carefree has a myriad of marketing programs,” Edwards said. “We have invested heavily in our website, www.carefreervresorts.com <http://www.carefreervresorts.com/>, and continue to make enhancements to it. The website features information about every property, as well as every home for sale within each property. Carefree has a web presence on various industry sites and directories. We also use print advertising, email campaigns, dealer alliances, participation at trade shows, and rally group programs to lure guests.”
”NRVC consistently upgrades its communities and when capital projects are approved, the work is done according to strictly defined brand standards,” Edwards explained. “A great deal of emphasis is placed on understanding our customer since more than 70% of Carefree’s business is repeat or referral business.”
Key professionals at NRVC shared their own personal thoughts on what makes their company unique.
”In the past 12 months,” states Charles Ellis, vice president of acquisitions, “the RV acquisition market has changed dramatically as the debt markets for the product type have all but disappeared. Most potential sellers have decided to hold on to their properties until the capital markets rebound. Only the most motivated sellers are coming to the unfortunate reality that capitalization rates have increased and their properties are not worth as much as they were a few years ago. My job is to locate the motivated, realistic sellers, and make them a fair offer.”
“Carefree views the RV resort business through the prism of the hospitality industry rather than the real estate industry,” added Roger Buchanan, regional vice president of RV operations. “The commitment and quality of Carefree managers and staff is second to none.”
Edwards, for her part, spoke highly of NRVC’s management team.
“Our management team is strong, with individuals who are experienced in all facets of our business,” explained Edwards. “We do lots of things in-house that competitors out source. We are a close-knit group and we are very adaptable. We have excellent systems and management information. We can make operational and management decisions and changes very quickly.”
”We are easy to do business with,” she added. “We complete due diligence on new acquisitions quickly and we close on time. We value the culture and working environment we provide our employees and therefore have very little turnover. We train our employees often and well, and we create an environment that motivates the managers to support one another. Most importantly, we value our customers and we don’t take their business for granted.”
Napp, meanwhile, a familiar face in this industry from his previous positions, expanded on NRVC’s ongoing strategy of retaining and enhancing the value of the properties in which it invests.
”Every year on the capital improvement side we try to enhance our properties so when customers return they see enhancements,” said Napp. “We spend in excess of $1.2 million a year that is put back into our properties and that does not include expanding sites or building new buildings. It is money spent on things like remodeling bathrooms, club houses, something the guests can directly benefit from. We hear a lot of that sentiment when guests come to our communities from other communities — that we keep things up to date. It sets us apart.”
”With respect to acquisitions, a number of sellers seek us out because they know the care we will put into continuing their operation as an RV park,” Napp added. “We are not developers and there is a lot of comfort people get from that. They want to turn their operation over to someone who will continue their life’s work. Twenty-five percent of what we acquire comes from sellers who know how we are going to operate that property. It is important to us to have that reputation.”
Carefree RV Resorts can be contacted at (480) 423-5700 or www.carefreervresorts.com.