$70 Million Mobile Home Park Trade Gives 'Windfall' to Residents
Equity LifeStyle Properties, which has an extensive portfolio of mobile home communities, RV parks and campgrounds, bought Palm Lake Estates west of Riviera Beach.
February 01, 2019 at 01:27 PM
3 minute read
David Bernstein, Adams and Reese, St. Petersburg. Courtesy photo
A publicly traded mobile home park owner-operator bought a Palm Beach County community for $70 million, paying resident-owners at least 5.5 times more than they put in, according to their attorney.
Equity LifeStyle Properties Inc., based in Chicago and listed on the New York Stock Exchange, bought the Palm Lake Estates community west of Riviera Beach from the residents' Palm Lake Cooperative Inc., which has owned the 147-acre community since 1989.
Palm Lake, which is for residents who are 55 and up, has 928 lots, and almost a third are vacant. 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.
“They are getting tremendous windfall for their investment,” said Bernstein, an Adams and Reese partner in St. Petersburg.
The above-market transaction breaks down to $114,006 per shareholder before taxes and other costs. Residents in the community at 7272 42nd Way North initially paid $5,000 to $20,000 for their shares.
The property between Interstate 95 and a VA Medical Center will remain a mobile home park for at least the next 20 years and possibly longer since the buyer focuses on mobile home communities.
Equity LifeStyle has a portfolio of 200 mobile home communities and 185 RV resort and campground sites in 32 states and British Columbia, according to its website. Some of its other age-restricted properties in South Florida are Everglades Lakes in Davie, Breezy Hill Resort in Pompano Beach and Sunshine Holiday in Fort Lauderdale.
At Palm Lake, the monthly rent will be $675 per lot, and increases have been capped for the next 10 years, Bernstein said.
Equity LifeStyle plans about $3 million in property improvements at the clubhouse and roads. The community, previously called Palm Lake Co-Op, had been struggling to pay for maintenance in part because some of the lots have been vacant since the hyperactive hurricane season in 2004, Bernstein said.
Equity LifeStyle plans to add manufactured homes on vacant lots as a way to push up property values, he added.
The co-op shareholders approved the unsolicited purchase by 90 percent.
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.
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