Expands Footprint Into Nashville, Enters Eighth State
Flagship Communities is set to acquire seven manufactured home communities with 1,253 homesites for a price of about $93 million. The deal is expected to close in mid May.
The purchase price, along with about $10 million in upfront capital expenditures, will be funded with the net proceeds from the REIT’s $60 million offering and the remainder funded with new debt financing.
“These acquisitions are the largest in the REIT’s history to date and represent a milestone for our business as we continue to execute on our stated growth strategy,” said Kurt Keeney, president and CEO of Flagship. “This is a generational opportunity to strategically expand our footprint into the adjacent Nashville market, as well as establish a presence in West Virginia, both markets that enable us to maximize existing synergies and leverage economies of scale.”
The Purchase Price represents a capitalization rate of 5.6 percent on year-one forecasted net operating income, and is expected to be accretive to the REIT’s adjusted funds from operations per unit diluted on a leverage neutral and stabilized basis.
Flagship stated that the transaction will increase its holdings to 82 communities with more than 15,000 homesites. It also strengthen the REIT’s presence in Tennessee while entering the core Nashville market, which is one of the fastest growing markets in the U.S. The Acquisitions also expand the REIT’s operations into West Virginia, which represents the REIT’s eighth contiguous U.S. state, and provides “significant growth opportunities to become a market leading owner.”
“We are excited to have sourced more off-market acquisitions through our long-standing industry relationships, providing the ability to establish a presence in Nashville, as well as West Virginia,” said Nathan Smith, Flagship’s chief investment officer. “The Acquisitions are comprised of high-quality properties that adhere to our acquisition criteria and also provide the opportunity to expand our presence along the I-40 and I-65 Interstate corridors, within easy driving distance to employment opportunities, hospitals, schools, shopping and recreational facilities.”
The West Virginia communities are located in Beckley, Milton, and Morgantown.
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