Sun Communities Inc., a real estate investment trust that owns and operates manufactured housing and recreational vehicle communities, has announced that it has agreed to buy 18 manufactured housing communities and one RV park located in Western Michigan from Kentland Corp. for $139.3 million.
Under the terms of the agreement, Sun acquires the communities, personal property and other intangibles associated with the communities, according to a news release.
It is expected that Sun will assume approximately $77 million of existing debt, issue approximately $46 million of preferred OP units and pay the estimated balance of $16.3 million in cash, exclusive of the cash purchase price for inventory and notes receivable.
The portfolio consists of 5,490 sites and is largely situated in Western Michigan. It is approximately 79% occupied and reflects a generally high level of quality with minimal deferred maintenance.
“We believe that our management team supported by our systems and procedures will strongly enhance the value of the portfolio over time,” said Gary A. Shiffman, chairman and CEO.
The company also announced it entered into a preliminary agreement with Fannie Mae and PNC Bank, which is subject to final approval, to settle the litigation the company commenced in November 2009 over certain fees charged when Sun’s variable rate loan facility was extended in April 2009. Upon consummation of the settlement, the maturity date of Sun’s entire $367.0 million credit facility with PNC Bank and Fannie Mae will be extended from 2014 to 2023.
Sun Communities Inc. is a REIT that currently owns and operates a portfolio of 136 communities comprising approximately 47,600 developed sites.