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Home > Affordable Housing, Business, Legal, Manufactured Home Communities, Manufactured Homes, Manufactured Housing Industry, News, Trends > Law Scrutinizes Equity LifeStyle Properties (ELS) Score of Resident Owned Community (ROC) Deal

Law Scrutinizes Equity LifeStyle Properties (ELS) Score of Resident Owned Community (ROC) Deal

 

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In December, the Daily Business News on MHProNews provided insights and details about the purchase by Equity LifeStyle Properties (NYSE:ELS) of their reported $70 million dollar acquisition of Palm Lake Co-op.

 

The community is now known as Palm Lake Estates, in Riviera Beach, Palm Beach County, FL.

 

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Lidia Dinkova, writing for Law’s Daily Business Review site, referred to the deal as a “windfall” for the residents.  Let’s see what their scrutinization of this deal turned up.

 

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David Bernstein, JD, with Adams and Reese LLP in St. Petersburg closed the deal for the sellers, “They are getting tremendous windfall for their investment,” said Bernstein, per Law.

Palm Lake, which is for residents who are 55 and up, has 928 lots, and almost a third are vacant,” stated Dinkova’s narrative for Law’s Daily Business Review (DBR). “Under the co-op structure, a resident had the option to either rent or buy a share in the co-op to obtain an ownership stake in the land. The land price alone is $476,190 per acre. About 20 residents rented, and 614 sold their shares in the co-op when the sale closed Dec. 14, according to attorney David Bernstein, who closed the deal for the sellers.”

The above-market transaction breaks down to $114,006 per shareholder before taxes and other costs,” per DBR.Residents in the community at 7272 42nd Way North initially paid $5,000 to $20,000 for their shares.”

Site fees will be $675 monthly, and will have caps on increases for the next decade.

ELS has plans for some $3 million in improvements at the clubhouse and roads. Law mentioned what is obvious to industry observers, namely, that ELS will bring in new inventory.  That process  of driving the community over time to full occupancy is underway, as the collage below reflects.

The former Palm Lake Cooperative reportedly was struggling to cover maintained, especially since the 2004 hurricane season.

Dinkova’s narrative concludes with two factoids, Equity LifeStyle in-house counsel P.J. Huff and Lutz, Bobo & Telfair attorney Richard Lee in Tallahassee worked on this deal on behalf of Equity LifeStyle.” And that “The co-op shareholders approved the unsolicited purchase by 90 percent.”

 

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ELS marketing site has several exterior renderings of model homes, a clear signal that they are gearing up for increasing the occupancy at this location.

 

MH Industry Observations, Questions and Takeaways?

Law’s DBR report, especially in the light of the recent events reported at the link below, raise this timely question.  Do details about this acquisition signal potential weaknesses of the ROC concept?

 

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While there is certainly hope by many industry advocates that the ROC concept will continue to grow, are there unforeseen road bumps ahead?

Furthermore, will ELS – and others – now pursue ROC owned properties as possible targets for acquisition?

Time will tell if some of the shine – especially in the light of the Millie Francis’ hullabaloo – may be coming off the ROC apple.  That’s MH “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

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