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ELS Announces $1.43B MH Community Buyout

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May 31, 2011 by   Leave a Comment

Chicago-based Equity LifeStyle Properties, Inc. (ELS) announced Tuesday (May 31) it had entered into purchase and other agreements with certain affiliates of Hometown America, L.L.C. 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, par value $0.01 per share, and 1.74 million shares of Series B Subordinated Non-Voting Cumulative Redeemable Preferred Stock, par value $0.01 per share, 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.

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